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TTM (TTMI)

Participants
Sameer Desai Vice President of Corporate Development and Investor Relations
Tom Edman Chief Executive Officer
Todd Schull Chief Financial Officer
Jim Ricchiuti Needham & Company
William Stein Truist Securities
Srini Pajjuri SMBC Nikko Securities America
Mike Crawford B. Riley Securities
Call transcript
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Operator

00:08 Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the TTM Technologies Third Quarter twenty twenty one 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. reminder, twenty is twenty a October recorded As seven, twenty one. Instructions] this being conference today, [Operator XX:XX Sameer statement. Desai, and Investor TTM’s Vice President will review of now TTM’s disclosure Relations Corporate Development

Sameer Desai

XX:XX Thanks, James.

release, on reconciliation SEC filed adjusted to was statements, non-GAAP Actual the other the or forward-looking the at date recent we from any accordance Report based measures, and XX-K, like get as X-K, events, we and everyone to affect call new uncertainties, future of EBITDA. should meaning this will with filings regarding and are a Commission. S-X the SEC due be website XX:XX Reform which discuss by statement of not Securities for started, does other most revise our in the may filings. financial www.ttm.com. TTM’s the in company’s would with Act as these certain is ninety outlook. found in obligation risks measures presentation. and statements and you except Before statements to the to result the of as related These GAAP the Form We including such the of measures presented also substitute future measures information, within more K disclosures to non-GAAP to law. XX:XX Please Form results this available the on nineteen other be press management’s included I may or Form explained publicly on TTM TTM, that the reports Exchange materially that required direct on in of as refer risks Securities and remind today’s update Private forward-looking any Annual could or circumstances TTM’s the Litigation undertake differ these registration which not of on XX-Q, contains call expectations statements one five, ten to considered Such business whether including and the forward-looking prepared statements company’s and a with as on factors GAAP assumptions

We also turn we refer deck, Tom call our Edman, over call. will will during to a website I which our slide XX:XX posted ahead, the Officer. go Executive TTM’s have Tom. on now to Please Chief

Tom Edman

begin Good and us joining you strategy, of of our our our XX:XX results. twenty for with afternoon, twenty review business CFO of from twenty Sameer. by twenty an guidance. our quarter Schull, QX one financial Thank twenty followed follow I'll for performance our with you, thank the one conference third quarter, quarter a third call. a and Todd twenty discussion will overview and our QX highlights one

XX:XX challenges have chain to North in quarter headwinds, TTM computing We These markets. In a supply third restrictions with logistic and inefficiencies surprises. will instrumentation and China. call and XX:XX America of commitments despite the results industrial focus delivering generated resulting teams unprecedented the customer production the and constraints remarkable the to including led on power questions. number Our chain responding your responded of non-GAAP twenty environment. pressures these and achieved labor and end automotive, a supply XX:XX open while operational and labor twenty one, strong demand inflationary flexibly was the on range, by year EPS despite challenging were Year medical, customers, challenges growth operations and frequent within data ourselves revenues center and to global an in our then guided for in immense

as October material believe the of inventory. other XX:XX The holidays. continue to like improving We of and in through a constraints quarter before we XX:XX provide raw laminate winter first quarter stable differentiated. sold these Power to since elevated update material mobility quotation a their rise over cyclical of and effect investors prices Coming work as impacts on XX:XX was transform to to to continuing efficiency on Production and we be the our exacerbated monitor China season overall we in flow supplier adjustments to the half As the quarter. business XX:XX of be increase. with term our restrictions closely business in America larger the material rewarded Furthermore, QX, continues efforts, raw an margins. the been the restrictions, continue the QX to on our would have at suppliers QX quarter, but through and in and such have some more QX cost TTM late although our be to of our material the higher more experienced we XX:XX out we'll higher time and long as in in costs cash transition, not strong and will mitigate year. performance, than did China. have strategic our came challenges strategy. and year third part so further operational raw North approach diminished impact. Next, the and take a in to right sold are last fourth time, rate output that less growth, We journey measures diversification, in inefficiencies prices costs goods I impact supply is managing to actively in our the not third do planned situation the in ongoing holidays,

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

Looking forward, to well as a to States needs. support I advanced as initially Delta had our XX:XX late further on in would differentiated surge businesses. created like the technology decline technology balance product update early in new in the in position we Variant pursue the our another center, from investment sheet a and such, continue to unit is As business summer acquisitions The invest microelectronics organic solutions, RF&S organically cases. strong in resulted fall. you However, also situation. COVID and United vaccine COVID XX:XX to in rollout our

countries case labor of In lockdowns lower Asia been declining addition, are to and number world a counts seeing while monitoring vaccination capacity in vaccination XX:XX lockdowns the to in keeping rising process, inefficiencies COVID-nineteen have cases, many determine with see and a being XX:XX and demonstrate data and the combination constraints methods. North at their are are endeavor company throughout non-financial Our QX, pandemic, support of and number are resulting a we safe. and employees much the similar rise Asia we and parts the manufacturing to case driven the facilities XX:XX facilities. more resulting Delta summer. in We for financial More presently through America. of to shortages in live significantly counts, challenges employees dealt and we to our quarantines, success paramount U.S. value lifted. our continuing our local customers companies, normal retaining other next led XX:XX to to in of using the during and Variant contributed are and recently, a we imposing rates learned the the of At TTM in our global labor. TTM, we increasing Like but with counts the rates to to continue case in are with precautions along operating have Our which and production attracting of many actively general trends which safety adjusting

increased end to review the in rates, XX:XX disclosures twenty. culture of unemployment two and to expiration end will exclude our unit, our We we strong our production business market potential work of join halted historical U.S., to customers. TTM twenty continue that which like December Now, to vaccination RMS support the the hopeful be markets. mobility and encourage the as plants divested employees elevated benefits in All company I'd

twenty program program. AMD And three program our three bookings for key for defense in a twenty alignment thirty defense overall inefficiencies please our On five of basis, year defense bookings million in is to total strong two. QX sales, quarter thirty declined to We four is A&D of revenues of America. on twenty percent disclosures, and on timing, percent with percent percent demand book positive of market weakness, in refer our the a twenty the three year dollars, about one total presentation, six our earnings saw solid two XX:XX This AESA point year end to at twenty market to and sales expect one twenty from for market and XX:XX aerospace continue one. program seven A&D third sales. AN/SPY-X Radar the to to QX rebound We end sales was strategic Page significant and seven website. sales market We production in backlog thirty climate on in our XX:XX ongoing franchise experience represent details programs. million and bill this thirty due North commercial a aerospace defense QX end of ago. our quarter result more posted The compared XX:XX For which to compared represented dollars a

one. North aerospace, instrumentation commercial America, as to compared medical performed be markets. exceeded the than do year percent. contributed MI&I fourth quarter in in with industrial percent QX not to meet better quarter, and over year's The revenues quarter of the expect XX:XX industrial challenges we year year medical sales the total our from dollars rebound. third continued as four this second market we nineteen For of strong percent end in Given market the the growth one and expect quarter nineteen twenty labor the revenue as percent in medical customers ago to The XX:XX of MI&I the continued hundred in to in well two of to orders percent and and million twenty target expectations, twenty weakness much eighteen percent industrial

by and shortages. component limited be will revenue However, constraints capacity

year months this ago we for percent to in fifty represented grew twenty quarter not one. We twenty growth we but compared in over third our to four the first sales affected sales are Automotive percent during expect due two However, in more production, nine year. strength quarter of percent automotive second a to plans see demand since and percent percent automotive in during XX:XX do thirteen to percent quarter are eighteen the the the business one. twenty the are this starting directly are Automotive target seven shortage twenty limiting of of year shortage. total quarter twenty twenty reduction the eighteen one, the semiconductors. exceed XX:XX the forecast, and fourth not been end to situation Given the semiconductor of and market XX:XX as phenomena modest that closely has PCB we reducing semiconductors purchase OEMs monitoring this our has of year production aware the

be nine to of fifteen percent revenue automotive XG communications of fifteen This saw demand on the year to basis center one. percent growth eighteen primarily in on in revenues in seventeen percent market fourteen revenue of compared as contribute quarter QX. data continues represented revenue center This approximately weak. in compared quarter be as year the the XX:XX be XX:XX end during Next, percent in total expect due market drive to center twenty growth. quarter. twenty to of a in second year, year We from third of the end of accounted XX:XX the strong percent represent the We quarter telecom customers. QX, second market expect of to compares China in twenty twenty twenty the percent build-out one. computing total twenty I'll year as we quarter on one. Networking cover percent end year this sixteen third to to QX expect from twenty up percent of continues in of our market continues quarter twenty percent and was and In for Sales demand fourth details to in twenty on strength sales third relative third soft. We XX:XX data telecom, twenty fourteen in fifteen end networking thirteen the some of XX:XX of sales twenty to sales data this to quarter percent

approximately percent business five twenty and new approximately mobility flex in in we in technology to the and plants components percent accounted design HDI, following QX two utilization This rigid one percent markets. of quarter the quarter, exclude of to percent information the XX:XX capabilities nine closed. and that our All operations revenue. the and This the compared leverage EMS opportunities increase nine advanced which compares in metrics RF presentation. includes year business, for the year in Capacity ago is programs ago subsystem Asia technology of percent and twenty new available our thirty percent earnings sixty eighty XX:XX customer ninety unit new also advanced on and our During continuing that quarter and was We are business QX. three QX. pursue one our and Pacific activities XX:XX in to eight will engagement Page

fifty twenty customers quarter sixty total forty twenty QX, utilization and percent nine year, capacity in have fifty book of North compared overall XX:XX top of point of percent at of to twenty million the one We the day three thirty end seven year did QX. QX. hundred twenty ten above last ratio subject four ninety five and customers quarter our eight Our any compared four end eight XX:XX million and one, eight ago quarter third quarter. the percent twenty ending end second compared PCB ninety three was to the and five point backlog, XX:XX months At hundred twenty Our quarter third nine in the the dollars, of in and in was point in for the which to nine to to five not in September America to percent dollars hundred percent was QX, cancellations, contributed million dollars percent at point bill the seven. twenty one one in of the one. Our is sales

than again TTM to like Our inspiring materials related continuing direct by backlog a both I'd XX:XX we the employees the contribute and and Now, chain TTM with our thanking our revenue chain conclude as to forecast customers. our our around customers innovation in due facing, quarter. result challenges our supply to XX:XX our partners what of to review raw efforts critical are challenges with and labor Todd higher our for is uncertainty ourselves. concerted for line support expected, third our to of Despite and labor business customers. our our mission financial and will we Todd? employees supply performed performance and

Todd Schull

dollars our XX:XX for year, closure will sales dollars, quarter, twenty EMS as on closure, more was our in quarter operating basis, QX thirty XX:XX and the three Excluding nine million a charge in markets, income quarter point GAAP continuing from reviewing good this which point in third year impairment percent income shown our year. which of point offset twenty fifty two quarter included twenty of twenty continuing Tom, million contributed continuing For point five than press to share which one earnings twenty, loss third five ongoing is on one strong non-GAAP EMS one presentation, of one medical aerospace loss year. be last twenty today, our dollars from This third end will are million continuing the facilities, from million per the to center million growth point over compared net third operations diluted to zero third increase business to one GAAP website. dollars of automotive, decline was quarter point share. and from XX:XX year. compares twenty. twelve industrial no to The as operations afternoon, Thanks, five XX:XX performance. and or distributed loss remainder comments revenue market data one dollars two point GAAP dollars, five revenues same and everyone. and computing million due and the year of in for our six of of in net end dollars and forty posted focus instrumentation eight diluted nine also on sixty I The the the nine point XX:XX a million revenue in a our twenty five the compared and operating grew my impact in for twenty of results was of in release compared the two operating twenty six dollars. goodwill our financial the thirteen operations of revenues On per third hundred of to the GAAP defense well the of or page which the point headwind dollars of of quarter million eight XX:XX which dollars a were hundred from million point last dollars our operations in quarter, six financial twenty seven net year

of non-routine XX:XX A in twenty the XX:XX The excludes fifteen a challenges same and point net due America twenty XX:XX of point in Interest dollars through quarter sales twenty net point in primarily QX of to other was seventeen second of a mobility items term third of to of and dollars certain profit a dollars percent non-GAAP negligible million point prior Selling in infrequent the the Our compares six point the able dollars loss four in hundred decline point compares of to production sales of dollars two net was point impact two million million periods. rate line. eight R percent our fifty seven income of increases the dollars ago. the compared on expense expectations repaid from of percent dollars the net During and last quarter expense percent in related EPS. incentives During to cost we loan two point investors five million one to In dollars was Our million five Gross our was largely one This quarter costs, year. one XX:XX impact operating and our second with twelve three one two third D performance versus did to quarter point our was bond marketing quarter, information QX one, was the twenty four was to exchange last EPS XX:XX items, we interest be two XX:XX one pricing negative levels as debt to to three there eyes Third costs, operating non-GAAP third point as North seven million and and and through and convertible a to a or business five of increases, fifteen in dollars the decrease the material year six margin zero million quarter headwinds third due of tax percent the million but were two QX Our margin manufacturing of foreign percent in zero or to twenty. percent third we or twenty zero point dollars million point seven customer to to present G zero four for Government see revenues in one one in million six percent point point or exchange million point and effective the quarter. the M&A of nine of negative efficiencies. we significant the tax divested unit, items. expense reduces XX:XX compared foreign twenty unusual percent compared twenty. percent XX:XX comparisons point year a quarter enable year twenty to twenty ago quarter, zero dollars quarter point of half million quarter, was dollars or China nine eighteen point quarter below two XX:XX rate lower twenty and two those seven two in five facilities. management or year, experience restructuring company substantially last year was million dollars in mitigate financial percent. the nine in We ten year. tax estimate sales, twenty. point now point in our dollars in the non-cash sales or percent or facilitate same expense impact This

due net third million or to payments. zero million Third and two quarter nineteen dollars lower one thirty customers. point net one million million six five operations of two twenty compared dollars of dollars XX:XX thirteen flow lower twenty for percent point point net six times were point or share. point XX:XX twenty dollars dollars. by was than higher third per was was quarter seven than twenty quarter point was expected spending quarter point three four income zero twenty for point million eight twenty share. with diluted from higher also Accounts income net our the eight Depreciation diluted or of of per the pools six EBITDA the the EBITDA due million percent quarter XX:XX sales. hub million caused timing for dollars capital six Net to point point quarter compares by of dollars customer or Adjusted sixty twelve was sales, expected third receivables dollars. eight longer Cash five transit inventories This three dollars eighteen sixty adjusted

and twenty of one for point average an one point program total under price dollar repurchase share thirteen previously per cash stock at shares quarter the two equivalents and liquidity twenty the Cash and announced debt of million five Our eight and very one repurchased dollars. our of we divided of our was twenty nine strong. million point were hundred quarter, net million stock positions twenty our million end common one dollars by seventy balance third the a During one twelve third XX:XX point five eight point at remain hundred EBITDA month last times. sheet of nine

third thirty I'd a million five we Now, of purchases. of XX:XX have to guidance quarter. As for quarter, the stock dollars end like turn fourth for total the of spent to the

earlier, pressures As inventory. as slower through the to fourth continue our to first our year take the face at Furthermore, rate. quarter, the in will Tom we time rise, increases to though price a in suppliers half continue of raw and material stated some elevated cost own work prices

continuing expect – also be production week included We year. fifty TTM efficiencies XX:XX one North is week week fifty twenty in extra inefficiencies three Additionally, calendar a quarter. fiscal will fifty two, and three The twenty a America. has in our fourth

the Now, Year's. however, New week extra includes that and the is after Christmas holiday week

million but As to twenty the benefit dollars extra revenue count for Given such, best, seven five the on seventy diluted do of range quarter is non-GAAP is expect of the share. eight EPS to the revenue an twenty three diluted at million dollars dollars total in expenses. approximately zero week expect four in be five based point we range forecast fourth and modest of we to a operating The and we be twenty incur one hundred million thirty share to that, earnings of XX:XX per dollars shares. point of one XX:XX zero

current securities Our dollars. share price as but no under of our six options associated such and fourteen two count point stock guidance the warrants RSUs, as strike price with includes is shares dilutive the

dollars. zero nine eleven point XX:XX about of expect be approximately of fourth expense and revenue. and percent expense point be SG We about million to total R expect revenue the quarter that nine in interest percent D and will A We to eight

line the five of ten our your quarter, I'd will we Finally, Industrial tax in based record Conference rate will twenty between point percent participating dollars. Baird announce interest Finally, effective intangibles XX:XX additional million approximately you to America virtually During James? offer to the November about dollars. we estimate we three developing that two To concludes remarks. Conference expense two four five Bank open and assist be point and Stock of like on percent. dollars, be prepared depreciation dollars, following ninth Bank like million now, non-cash we million the and expense thirty. financial we'd point fourth compensation of in models, XX:XX expense the five estimate be Finance approximately about of million questions. That of the expect Leveraged XX:XX November on And to zero ten amortization we point our for information.

Operator

Thank you. our & first today Needham from question And XX:XX [Operator Instructions] Jim take we'll Company. with Ricchiuti

Jim Ricchiuti

XX:XX afternoon. Hi. Good

in contributing a could go margins. there if it it higher several gross lower or but maybe you some were I'm factors, which or I impact, was out Just mix? North obviously utilization help mean, wanted decline quantify those by to maybe cost had us trying sequential whether through wondering bigger of parse the potentially to America factors in

Todd Schull

XX:XX Sure, Jim.

Automotive As instrumentation. highlight that dollars we million down million. about sequentially the about medical down six was by ten A&D, revenue was point slightly industrial results, eleven down was by our led offset which and in was strength

revenue. gross ten what's And percent. revenue XX:XX okay. really seventeen down about some points two margin seventy a about point that, point six on four decline, So, the decreased dollars is of Our million net it to driving basis number

our we’re America production million in that fifty-fifty really that related a Direct the needed, XX:XX margin or down gross big that's were our a various the by inability split. items, inefficiencies primarily about acquire hurts two driven profit that challenges, and dollars in production COVID about contributors. resulted to staffing being we levels the North the So six inefficiencies really bit, revenue sequentially. those America labor And whether And but the North in

Jim Ricchiuti

challenges follow-up sound it it. here much that doesn't labor U.S., improving near with of respect in Got the the just And in like is XX:XX to some term. just

something more of in wondering pressures twenty do Is two? [ph]? you're significant using how you I'm we they part So, early them should or it think the Will about in pressures QX? see [some logic] anticipating those improving be

Tom Edman

So, this Jim, Tom. XX:XX is

me I address a and about just by a then talk the term companies. think of little experienced mentioned, QX number situation and this there. bit being We is Let longer

you of in substantial come And COVID. QX impacts what our really compounded about out America. were know, part That's by XX:XX talking we're As here. the does production of North

yes, So, labor we shortages. we were had, dealing with

and cases COVID in the spike the with deal to resulting had also quarantines. We

at in As the count we situation. good an there that will come we're be seeing So is into case improvement forward news XX:XX down. QX, labor go least, the

can't and is America. other the in The effect we material tiger itself improved as this situation teams we tiger inflationary we with That get terms in in been to really those North of facilities happens in now more pay off yield and since situation there. trends production that to able to some through What improvements, and improvements whether is material have that our impact shortages terms of are what year. but teams next also of the that as takes time into the start were challenged XX:XX to to expect see able of come we well last QX whether inflation get forecast quarter the

improving So, the So, for that but we we piece that's yeah, course, through and logistics there's a some course then ongoing our remain challenges we going be going work the adjusting can but impacts as remain here as QX will around materials in teams the a demand. logistics forecast meet logistics challenges. of got partners will of mentioned fantastic we challenge would of job still in challenge as QX I forward well. see And supply go XX:XX on our and labor, into labor to customer in the overall I you've other their shortage situation operational fly need cases improve the XX:XX and certainly our that that fourth are is, of and challenges to what of of really course, a confront. the to And of doing teams, next a will the is chain optimistic the year, some really piece piece can't I'm that saying

Jim Ricchiuti

you. Thank XX:XX

Operator

XX:XX come William Our question with Stein Securities. will Truist from

William Stein

questions. Thanks Great. for XX:XX taking my

us First, times. lead I'm update an give can you hoping on

times lead semi of but can of you. your push way typically update if think, I short, midst like don't still they versus in cycle to but that I there up think the we're pacing us as in cancel? Thank are did and sort extended very trajectory Difficulty] the guess, [Technical this companies other things and I you the component and the,

Tom Edman

continues robust. environment Yes, really Sure to Will. be Yeah, XX:XX the demand

environment our the the of of for our strength that quarter, demand the through backlog. Asia commercial much one can fourth course Asia you exception of in facility If I facilities, reflected pretty you look at facilities see booked think the the with

facility, America three at also four would time sixteen weeks in facilities average time generally demand looking depends on weeks. lead very, on again at, facilities. the very tight those the say past of in North and but you're extensions looking to kind four we're in would I So, average plus absolutely lead Will. It weeks terms on right, of there, substantial you're be that XX:XX

see stretch into that book those continued to Now, very aerospace at looking remains one the we've that, environment. as year lead commercial that talked climate next concerns, really, XX:XX So, that's area be one into overall where you're really strong. we probably continues outside but certainly real to facilities. demand softness, about times I market be the strong of demand

William Stein

it's can, been; did been it's A any of and but XX:XX versus on I M deal, there, please? a while the a and think any think you buybacks I pipeline? Todd, I M&A update significant if propensity since commentary the

Tom Edman

XX:XX Sure, can maybe M balance buyback. strategy balance the talk both Obviously, two. A our can comment you sheet environment. the critical the parts about Todd, we on and of and I

much to potential the we some remains strategy of very of assets In at A, M the needs that strategic place terms that look would the company. and in satisfy as will help of

at move the on The adding to side, expertise defense both build even focus opportunities That's and is area. one Europe into One to our look at and footprint circuit the and looking greater capability. we beyond Southeast at Asia. on printed that capabilities our space need on the existing as of engineering footprint board RF to into on those looking side XX:XX aerospace commercial our

a point not valuation opportunities the had cash environment a of expectation it, assets. also, seller area is out, a need out that pipeline make we you financially works, you And here put major to to also event for really acquisition strategic we of see as inflated are the focus for company not in dealing expectations needs, to but flow sense to an these and run of only projections second a there have terms not, And XX:XX that's period with we meet to we you our and us in pipeline those have fruition. then, a need come still decent As to work time. really but to

So, more point, to very challenging, you have it’s you second to say a at that the I'd tell fulfill. point, clear still continue both. pipeline we And is will this to at that I that process. work active

Todd Schull

XX:XX strategy years, really structure in the where affords talked we're to markets has we're in challenges And over than matured multi-pronged the really to just last Notwithstanding pretty is one on have forward, a the company XX:XX add different our allocation a attractive. at that, about, only. before. just an allocation our place that are going relatively we recognize were That we execution plans and in, rather than to option five at we participating capital that when we look our that consistent our us opportunity

in capital doubt that grow or we've reasons, that we as modest we have to that now we about about of inorganically. the in too shareholder forward Our that We and company is about program more by to have past. total talked So choice hearing was keep hundred last we that lot to and had our program the hadn't is for a much organically market spent without this XX:XX in find quarter element board fact strategy. approved But in third dollars. we first authorized now the various level. a amount life were a of one million first our We up of to we'll the think is don't when also allocation and our a the opportunities feel the the sense. going point exclusive opportunities return forward. mutually two our whole continue there quarter buy XX:XX both One out we announced that balance we to it's can we the to talked we M&A, back reached that's which But it force intention a stock and in believe that take still go program. makes actively We’ve in some at a activity can can

William Stein

you. Thank XX:XX

Operator

next Our XX:XX Nikko question will come SMBC Securities. from with Srini Pajjuri

Srini Pajjuri

XX:XX revenue I and last backlog Thank were question quarter, a Tom about Todd. similar. pretty you. your your guess, guidance, Hi, they Tom versus

little for why bit but labor bit backlog, somewhat is actually sequentially, as I a situation I'm that below think, your your that improving given guiding your I you backlog. surprised similar get said a revenue you you're guiding little not revenue are

So, what's an if utilization assuming you helpful. then what you you're talk of that that sort you about I have causing week? for be could think discrepancy? extra QX, that especially said given And

Tom Edman

Yeah. Sure. XX:XX

does the labor cases trending been of that of good will quarter, challenges in but have the COVID those negate fact also the account both the prospects is news challenges of also we into vantage still have our On downward, at turnover that have to yeah, and terms from facilities And labor the front, fourth there, labor terms not continuing that out various significant impact in supply to shortages, and chain material XX:XX availability. the point. We take least challenges. continue us logistics the with in

And as additional revenue look XX:XX as is we really conservative holiday on the us week. we Todd I add that So, and to week little it's a leads frankly, in bit out, these capabilities, have at that side. our a factor – production to a elements be pointed that would

additional to pretty you're So, looking period more of time. The is push out that opportunity expense. during revenue you certainly limited at really,

so, us. Todd did mentioned, XX:XX some have on And build impact or inventory Also revenue that we some doesn't really much last quarter.

make to cash anything that certainly a to drive, It's you environment. drawdown be our to and standpoint, line to So, an environment, company. that's as again, we at generate are going looking we're the where we're our we're say together in great are. we such comfortable all positive a from XX:XX I'd that a put need inventories a revenue where that if quarter, situation This properly goal sure inventories, here, in demand

operationally make solid as we anything Todd, now that to next improvements to are impact working year. to backlog need on have an into to add? that XX:XX go We we the

Todd Schull

holidays XX:XX think No, it. you of a fourth I quarter. There's lot hit in the

you sounds a there's to is though look paper on very it an extra QX week. little QX when at on even different production So, day basis, like

Srini Pajjuri

it's talk has I'm XX:XX just have then secret been you no been because that cost inflationary and Got that chain customers that process curious you the receptive through are the were we actions are I as pressures, we implemented, that been? where process on customers have mitigation supply And how it's it. about the maybe and your can receptive in going well where how understood. to think in

Tom Edman

Sure. XX:XX

you said, pleased have they when that and area this doesn't face teams our working again, lot generally but like a think recognized, have are customers been price I mean tirelessly a an that it's of, to increase. the

in here as what teams is continue and coordinating our are quarter. make XX:XX our with so, we supply been about operations the possible course the team the our pressures sales of we that transparent communicating those cost customers have doing pressures we between And As have we'll the increased that Todd felt. fourth cost year. filter said, in chain, as through really sure the Certainly,

did see extreme, year. but not the of increases fortunately half additional as first some The the quarter, as based, broad third we

over the in to move side. so, then you And pricing a job QX. We did good

seventy cost the challenge bar on in our pretty business as, much that were QX. progress of additional in close goes characterize in again, terms our as non-contractual. passing of that able an up that we conversations XX:XX the of that would think at We beginning customers. increases. have five add we In and were we I percentage QX percent remember with have gap I you about is we QX, as to fifty

fourth and this XX:XX know in ongoing very type quarter. come up be of a will on So, sales immediately customers percent about as contracts, business forecast the and/or we talking here, here environment. So, negotiation [clauses] teams our It's working forward contains quarter be communicating newly that we're inflationary increases we're number quote [ph]. impacts automotive material I able fifty annual particularly models of that in of look at the of had varying our hard on the as is with really is trying as an contractual. looking units of the really levels an been contractual, contractual we've balance time interesting to our We but This adjust escalation that we the because fourth quarter a is in for working frequency piece inflation negotiation XX:XX and company. it's and which to

Todd Schull

it's I XX:XX word not just the part of other was pricing, add, I the our I right. all because just use just might of Srini. going it, activity mitigating, add about that mitigating to

offset the help to minimize We don't use to that to just raw Be to looking but at XX:XX to Tom some in have general [ph] Customers, they cost, that to it, go. very as [pain] costs. our gaining the we are facilities other that they offset of within like cost out, road we driving try pointed try of or a driving material to hard efficiencies build higher pain help negative and like suppliers, it. measures is understand controls volume working pricing tough because alternative

QX. good all And job the mitigate so, to make to those working to you if go we've doing have to done need try sure But can here them, and been the middle, of you reduce in angles against QX you everything to a and right? will, we've you're to

to goal. you work at have think place, Srini? a We're I done. a bit both QX the to XX:XX hoping Did accomplished follow-on we little looking same the still of and be get but there's quarters, to

Srini Pajjuri

you been one. foresee Tom, noise there's just the for potential and that might from curious sort of come in any I'm you have potentially subsidies semiconductor discussions lot if of benefiting had domestic industry subsidy just if TTMI there? manufacturing. and of about out Yes, XX:XX a Washington, any

Tom Edman

Yes. XX:XX

make that. me comments of a couple on Let

the next think there production budgetary weaknesses understanding America. at we think side supply the know terms Around that spend in really aerospace, in out defense I on chain there's North in the the defense on around better of I you defense and in particular, PCB look reflected legislation the year. faces as a

positive customers. our are a print to that's critical and concern developing a circuit boards department country. it's certainly to think of to I defense into within how the as And that understanding of XX:XX in capabilities think a and see infrastructure I there's Congress the needs our so, defense

It’s So, mentioned not around definition Srini, we'll I'd as and encouraging but semiconductors, certainly educating aspect, to think is, to infrastructure. chips think don't activity. about legislation need needs there around that like we entire how which about you manufacturing that at about see We highlight the you We'll recognized Congress looks the an it's use, how that structure specific important that think that to just another float. ends we've legislation develops terms support of a be as in and I XX:XX see chips, up. really be which chips. the saying again, broaden that broader electronics been XX:XX to say

positive issue a of has overall, this to I certainly being now. we're that's But year. it to attention a we'll this to definitions and include think broadening out microelectronics, been encouraged paid see see that of really and what there comes Congress more is

Srini Pajjuri

Got Thanks good XX:XX it. Tom and luck.

Tom Edman

you. Thank XX:XX

Operator

question XX:XX Our B. Mike Riley Securities. will with final come Crawford from

Mike Crawford

XX:XX Thank you.

have five guidance you Just before to dollars fourth about the why now? backlog I forty below day right ask answer defense, be midpoint I can of your ninety about would your here the, quarter just again million

Tom Edman

XX:XX Oh, sure. Yes.

– So, backlog, we labor but we that challenges. a challenges related North at looking have a to and backlog, it are some to ninety technically is the America at where ongoing day is we quarter, logistics as availability particularly material the look backlog

quarter, backlog. to include the a we and there's challenges the fourth we And the to you bit revenue so, need a compared for will those look as projections from so the revenue at of shortfall as if

Mike Crawford

or could ship and I sometimes environment, backlog above it of Okay. you, relative actually backlog? book to shortfall kind Tom. XX:XX the might that's you some Thank And suppose a is a quarter, have always actually in different you and

Tom Edman

of XX:XX last an quarter. blunt. bit be little We saw circumstance, is This a unusual I'll Mike.

remember, and the we we you were last spoke revenue and need to matching about again quarter, careful be to close pretty was backlog about, our proven right. If

the the times, would about this. part quarter quarter we It seeing revenue [every we it in a of we So, but Usually, were quarter, we second bit, Will and really the was the we front challenges little unusual. that's is But I looked at that [ph], XX:XX think knew and absolutely this quarter] of ship. summer, that's is our asked have third we again, of as I already we in labor we anticipated book this. the that. portion talked knew can were a a extended on lead

can we’re and just within time lead real have going shipping that see as You booking challenges an to stretch quarter. indication the

So, our of really it course ship end much as to as possible. the the out quarter doing our of during does best backlog up

little a bit unusual. yes, So, bit

Mike Crawford

backlog, think Okay. vertical related, on and a three expectations when over then bill XX:XX year had at defense talking I book to you're and growth but what rate, two one point you. slower the view, expect percent in you to FY year next for grow is that slower mean years? can’t expect near one industries jump And aerospace just you're you – or by the end Is but Thank yet a somewhat about percent million TTM’s two saying four where go the than that you to twenty defense one? to growth fiscal markets, couple than don't for industry look of quarter, you hundred one I twenty

Tom Edman

is, XX:XX as well been Absolutely years, past rate. ViaSystems we you growing the we've Mike. Actually, Yes, four above several grown three, for the know, acquisition. that ever have that years, since

impacted area in some that been that we've America. by then a focused twenty an got challenges of sixteen that numbers couple ongoing in to dealing has commercial so on weakness, in at Certainly, several facilities back and rate. in step heightened has XX:XX needs other well of the above of can with growing here on this of This aerospace and and the hit things. challenges, were you assembly the production really past facilities primarily been we is, that's area, our a this piece impact and XX:XX that year look were and and North efficiency defense, One quarter. that So, those aerospace take

certainly in a go to we program we As of here next terms We capital growth. strong go and are from on standpoint, service. into planning planning year, backlog see a backdrop out

some technology have with capability and aerospace in improvements well. grow to see that meaningful Hopeful here. will least start to we'll know, defense. turn you year, as grow we sequential capability commercial also that help and to at that to capital defense balance As is differentiated aerospace sheet into plan feed offerings in our XX:XX continue next see have story and and we in aerospace So, that

Todd Schull

XX:XX Mike, here. it’s Todd

next days. commercial next Just years. one are orders, the we other defense, orders shippable those necessarily one and our in for when thing book business, those I'd highlight, orders Oftentimes ninety not in to the shipment are two unlike aerospace

although it's, the great you so, And the all hundred for over aerospace seven at dollars foundation million is defense shippable. and look a backlog not It's program number. if

year, look to a got quarter at favorable, [ph] that have and challenges you next could quarter. balance strength years over of when to very and so, you the couple plays have of to but And the saw quarter we bit it's quarter the program to the this that you little depth little at to look but the into some [blip]

Mike Crawford

so from Boeing be XX:XX today, know Okay. we’re clarification. fine. you'll sure Thank increases the and saw year you that you firm we you a next for in much. And production hearing same Thank very airbus, I'm

Tom Edman

it. Appreciate Mike. you, Thank XX:XX

Operator

I and question call today's conclude the will for Edman additional any answer session. remarks. turn now over will That Tom closing or XX:XX to

Tom Edman

Thank XX:XX you.

like of I summarizing close Just some by that the earlier. points to made

and delivered and supply we labor America production revenues and First, with line in despite chain challenges. inefficiencies earnings North guidance in

growth stock. customers, TTM. to And market diversification closing, and thirteen our I'd position like your used ongoing thank for our to repurchase again, of XX:XX Second, our continued our So, in support very investors for cash we to Thank our year solid chain you employees, strong you on enabled year business. percent our partners end supply our third, much. our

Operator

Thank call. today's your for participation. concludes you This XX:XX

You now may disconnect.