ST Sensata Technologies Holding

Jacob Sayer Vice President of Finance
Jeff Cote CEO and President
Paul Vasington CFO
Paul Chawla EVP, Automotive Business
Vineet Nargolwala EVP, Industrial, HVR & Aerospace businesses
Wamsi Mohan Bank of America Merrill Lynch
Samik Chatterjee JPMorgan
Craig Hettenbach Morgan Stanley
Amit Daryanani Evercore
Mark Delaney Goldman Sachs
Shawn Harrison Loop Capital
Deepa Raghavan Wells Fargo
Matt Sheerin Stifel
Joe Spak RBC Capital Markets
Brian Johnson Barclays
David Kelley Jefferies
Joe Giordano Cowen
Jim Suva Citi Investment
Call transcript
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Good morning and welcome to the Sensata Technologies’ Q1 2020 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mr. of President Vice Sayer, Finance. Jacob Please, go ahead.

Jacob Sayer

Keith. welcome you you, call. And XXXX good to like I’d everyone. to conference morning, earnings Thank Sensata’s quarter first

me Sensata’s Jeff Paul Joining Sensata’s call President; Vasington, Officer. and and Cote, Financial Chief today’s on CEO are

Chawla, Paul Q&A. Industrial, and provide our of our and additional available to Aerospace businesses, market-specific by Vineet joined Automotive EVP during Nargolwala, also EVP We’re be insights of HVR Business who will

a from today, addition presentation to this release earnings conference will The during slide In Relations referencing call. we issued today’s we presentation be earlier could Sensata’s the PDF website. of be Investor downloaded

a We post conclusion of webcast call. replay will shortly after the of today’s today’s

reference Before statement Safe Harbor two. we to on begin, I’d Sensata’s like slide

make of events the forward-looking statements During company of the the risks course regarding financial or will this and performance involve we conference certain that uncertainties. future call,

from discussed results Factors to, but actual those differ that may as as forms other subsequent cause well company’s are these might statements. SEC The described include, filings. in and XX-Q differences materially in XX-K, such limited our not projections

Sensata’s subsequent number will during GAAP results addition non-GAAP to slide today’s today’s in will financial show of review XXXX. GAAP you we we three, quarter statement for the our Most presentation. be related to information We encourage that On the first to call discuss financial measures.

its the measures provides of in the release and XX are uses earnings details our in management and the operating our of included slides presentation, presentation. financial to which to GAAP The webcast are Reconciliation evaluate of income primary XX company measures non-GAAP our business. on segment

discuss key growth Difficulty] of our the in provide revenue a position outgrowth to and some well with the responses, markets impact in the strong will the areas. review underlying relative from today’s megatrend first begin recent overall will also progress our QX and He Jeff business company. update of of during as an Sensata’s financial as on COVID-XX call particularly [Technical our

Paul we describe our detailed provide that performance - into will our to insight model the use businesses. financial future then indicators our and economic estimate cover leading of

then will prepared We your take after remarks. our questions

turn call and President, CEO Now, Jeff over the to like I’d to Cote. Sensata’

Jeff Cote

Jacob. you, Thank

As you foremost customer COVID-XX we flexibility. enabling recognize and wide safety see to range that took the needs global impact slide on to this four of month, while can we earlier you and also ensure shared the to financial our design of our employees, serve across early, and first with of our critical and health a organization us enhance steps

this so as position actions serve worldwide from stronger communities. to shareholders, better disruption, we employees, Sensata even emerge well These can customers, our our as

agencies local, countries, many state, and moved measures of health quickly help COVID-XX. protect spread federal to with employees Working and in implement the minimize government we to

facilities, central sanitizing facilities, remote leave providing instituting actions mandating possible. our high staggering as checks times, much At health implementing included workforce, paid distancing work for as employees, these our for a work level safe at our affected

given how stepping work our able normal. the that While our it’s our I and are us from for especially doing challenge recognize report up am teams to to from adapting are colleagues, the learn work of some all not to been a new of that to we home. pleased to so, importance remotely of employees

shelter for manufacturing of working have we and closed By businesses. our As have and we I speak closures sustained issued are manufacturing have today Governments locations, most authorities in in open, demand after levels. deemed operate, orders essential. facilities facilities place been in adjusted jurisdictions certain brief our with production where non-essential

We manufacture for defense, critical transportation, and essential equipment. products an as industries such medical

crisis. operating keep we that important is it this So during

enhance have taken position, strong our a financial and financial in we steps We’re to flexibility.

ramping are Implemented for our expenses reductions and management furloughs. certain down expected salary employee demand. quarter, lowered in through reductions in line spending the second have operating in production market end with and We facilities discretionary

have are senior we second we management I a cash taking XX% $X, reduction pay are pay, all reduced taking of our furloughs compensation seeking of quarter, the in salary reduction and a am For portion are a the and XX%, members from director’s similar of indirect by employees. through - all non-employee in

quarter. are have We total program. facility position, on suspended and reducing expenditures, very our billion temporarily in than the our share managing revolving our drew at cash capital beginning working We of our more credit enhance $X.X capital down And second we carefully. buyback the to

impact clear. visibility our withdrew are our this future also will for early to less the tracking crisis leading guidance economic of became financial we estimate discuss year revenue into Paul, fiscal April, as We shortly. XXXX in indicators

a times, our Throughout to be to and they unprecedented disruption. reliable customers, strong too we’ve proven face partner ourselves and uncertainty as these

We in to discuss will detail initiatives make our key are and on Electrification, more Smart & continuing Connected progress which I around momentarily.

yet We ourselves areas still investing opportunities. have in to environment, good growth rightsizing long-term significant that of proven organization as offer the our stewards capital,

We global have our supply flexible structure, and times. the integrity cost under the difficult chain demonstrated of most

and our continue All confidence strategic of us gives to our execute. to this ability direction in

The central. on And this our continued during focus market unprecedented our aggressively managing operations, we strategic are environment. remains direction

global the communities, slide our especially around our customers, we shown partners, in on suppliers, escalating As world. the which COVID-XX, and operate of worldwide as rapidly entire the adversely the employees, impacts economy, five, affected industry,

of so responded in entire base is concern, proud protect our this first The the them, we’re and wellbeing organization from doing and and our ways. can has spread extraordinary to crisis, locally our we of to the how employee health virus. everything globally I’m of

is GDP, as we which in shut extraordinary X.X% China This businesses. since decline first GDP in in of quarter the of reported the the examples include, Some Chinese the keeping record year-over-year in government a began decline first currently quarterly operate times, XXXX.

And first first in global markets production volumes within vehicle out market dropped years-over-year. primarily also of our China. decline quarter, wide Global XX% a in industrial we XX% the experienced quarter in the driven

for we to accelerate XX% spread came global of second quarter. for the and the automotive released COVID-XX production the to According later data production is expect in second response the slowdown quarter first to the quarter year-over-year. forecasted decline, Given to the latest by this the in that US, IHS, Europe

With production expected XXXX expected X% to America Europe according IHS, China full year is Also automotive to Global to decline now expected decline XX%. to decline expected the decline and XX%, for North to XX%.

In addition, for substantial GDP QX, Global is end-markets. will other in our predicted a decline impact which

strategic Despite significant these demonstrated our outgrowth delivered challenges progress first on We declines. Sensata for year. the the in substantial has despite market end-market quarter, goals

of to the continuing opportunities in we’ll drive are that this were invest new company. for win We through and period disruption long-growth business once

for XXXX. revenues of of lower. which substantially Now And volumes organic Overall let decline quarter revenue me reported the discuss we our performance were $XXX.X end-market million, of first in XX.X%. by represented

I’ll end-market first the Off-Road Slide six performance revenue a decline. Vehicle business. organic organic revenue posted outperforming & begin end-market Heavy our by XX.X%, with shows XX% decline HVOR for quarter. of

business Our of growth, regulations. by post than better of a China expected NSX content continued truck strong emissions driven performance, on-road as to result the adoption

revenue organically Industrial quarter aerospace first XXXX. and the other of for XX.X% declined

declined market of aerospace and Our decline. X% continued with growth organically X% grounding business content offsetting roughly production flights, a reduced the

declines market pandemic more related global XX.X% declined Our industrial than slowdown driven and industrial businesses by XX% shutdowns a extended in of approximately from China of organically, XX%.

quarter. driven quarter. declined of the was automotive decline posted end-market organic market business This the in China an in primarily XX.X% automotive first XX% an XX%. decline by Our The of

significant of auto decline. offset strong content to since growth However, portion this a helped

we customers As facilities declines North see reopen, we plants XXX in substantial meaningful and to businesses, to of up expect for points recovery. closing begin posted linked our market region, European and last basis production revenue weeks this automotive of outgrowth. ramps our still In two Globally the to quarter. saw American the we

inventory In reopening saw their We they ensure the during estimate expect plants inventory this to supply could approximately build, and would unwind growth from we when coming basis we in OEMs build part points and China ramping coming addition, to have in that be primarily in of quarters. XXX that the quarter, production. this

our well underlying equipment. competitive the our significant first strong the our Sensata efficient, outgrowth the solutions in on sensor-rich is in more electrified as as in connected cleaner slide all of as revenue growth shown end-markets, Despite relative challenges high seven we and position quarter, serves for subsystems, to segments end-markets. end-markets and delivered

new continue years to are and enable We we pace that achieve growth us significant to business recent outgrow to underlying have wins in a end-market on secular secured production.

Underlying most driven consumer has and cleaner been new efficient equipment, wins regulatory business. of long-term towards more our the are drivers of trends fundamental safer, and recent business which our

we Despite aerospace. to vehicle headwinds, end-market serve in relative the significant continue basis XXX of market quarter automotive and points heavy and that XXX XXX end-markets first outgrowth in the points basis basis off posting outgrowth current road points to in demonstrate we

with is the in in local regulations at China, and Similar of adoption are new regulations The OEMs. in emissions. content these us BSX driving EUX India significant NSX for automotive reducing to in Europe, regulations aimed emissions HVOR

installing include North are control well. more exhaust To Europe systems and Similar temperature driving meet and these advanced OEMs regulations market regions that in as our strong pressure in America differential trends sensors. these outgrowth high are

to are making megatrends slide on we want initiatives. to in I Moving progress eight, updates some share our key

and believe diversification, competitive these to market growth advantages provide continue trends our We as investments these increase transform important our our world. long-term will rate, further

we slowing investments Despite meaningfully that no these the of see evidence are COVID-XX, in impact areas. customers their

new & area closed Connected over to business customers new our business being $XX This with within further vehicle total we and network QX, million a $XX with During $XX sensing the of quoted. Smart brings million initiative. million for solutions

leading maintenance within than North them We’re far works trucks active our more trailers of costs. pilots results with of and fleets our X information environments, vehicle in & downtime demonstrate capturing world’s on with Smart world and fleet so some reducing that data real mission-critical Connected the and solution four in and providing Initial customers’ readiness of million very well testing miles America, proof-of-concepts managers. on

such we Electrification as are for and those critical as other equipment, solutions include the battery vehicles, stations. provide, electric applications products and hybrid On we expanding as we well charging electric front, for the

QX million Electrification. the During new $XX closed of in wins business in area we

position, penetration, opportunity thermal gradually offerings. contactor, runaway Our represents it - our sensing as management, an increased and increases for voltage high Electrification its e-motor thermal

our of disconnect into Electrification offerings voltage fast acquisition contactors GIGAVAC devices. high The expanded and

establishing challenging levels. premium quickly for the standard current the applications high as premium standard ourselves equipment, with are most the We - particularly for

efficient to a first production highly high production the voltage growth contactors facilitate line. Mexico began with new we in During quarter, Aguascalientes, of

We diversification for our these demonstrated are long-term against market new progress as two which offer significant initiatives, well pleased as with Sensata. opportunities important

XXXX turn after like quarter review to summary and to leading economic the indicators track, Paul? detail now to our I we some call which over Paul will provide first results in comments. that more I’d describe to

Paul Vasington

X.X%. on of XX.X% decrease Changes first a first $XXX.X by in Key quarter you, of currency Thank million, for slide Jeff. from as highlights XX XXXX. shown the decreased revenue the of foreign include, revenues quarter

of largely organic XX.X% impact impact of pandemic. the currency, the revenue foreign to Excluding COVID-XX declined the due

operating quarter altogether income of align declining $XXX.X ability restrictions, manufacturing market million, our elevated from demand. lower to the revenues, limited significantly first to to end cost local costs which and to capacity, at of employees, Adjusted XXXX, headwinds facilities safeguard was lower running due to decrease a XX.X% our our our compared government productivity the primarily

development retain megatrend to costs Higher as talent design growth new offset programs, compensation mostly and and well spend year. wins savings actions business taken were on Sensata from repositioning last top execute by as higher

adjusted better income $X.XX XX.X%, of slightly first first quarter XXXX. net compared EPS compared decrease than income, the prior a decline of of was Adjusted to was quarter, decrease repurchases. a Adjusted the share to $XX.X quarter in the XX.X% million, benefit the year and net in of

to performance on in the decrease of Performance to slide XX. first our quarter of revenue last with XX.X% I’d of the I reported a two business Performance $XXX.X quarter quarter XXXX, Now first segments of compared comment sensing in start year. will million the Sensing the on same like XXXX. of business

negative revenue Sensing the foreign decline of organic X.X%, from Performance XX.X%. currency Excluding impact an of reported

Automotive organic by reported, XX.X% end in the revenue its decline but an business XXX Our first market outpaced basis quarter, of points.

regions. major In addition, each in organic declined of geographic our three revenue

content primarily, road business points, decline of market on regulations. the driven XX.X% the truck but Our to adoption end revenue outpaced and sharp quarter, HVOR its China emission our growth by an XXX reported by first of due NSX organic basis in business

a quarter, XXXX, last same Performance was a as of XX of profit revenue quarter points of to XX.X% last compared Sensing the operating the percent quarter $XXX.X first Performance in XX.X%, the decline same in as Sensing was of income million for a basis the first quarter year. year. decrease

savings megatrend segment wins was by and to operating and The revenues, decline offset operating lower year. capacity and in actions business new significantly manufacturing in facilities somewhat income driven execute our by growth repositioning programs higher lower development primarily last design effort taken

quarter a Sensing compared first quarter of XXXX, to shown million decrease XX.X% XX, As the year. revenues in the of slide same on Solutions of reported as $XXX.X last

negative Sensing the X.X%, XX.X%. impact of declined currency Excluding organic from Solutions foreign revenue

industrial producing delays XXX growth in organically markets above Revenue our our in in end as aerospace declined market, organically in quarter, in business X% XX%. and first quarter, declined a declined Revenue declined business XX.X% basis production the end which first aftermarket. its OEM points of weaker the X.X%, industrial

income decrease XX.X% percentage first points for in quarter, of of quarter Sensing as in the of $XX.X quarter a a the Sensing of was million Solutions the profit, last same year. was operating revenue XXX XX.X% last quarter first the decline Solutions from basis XXXX, a year. same

unfavorable mix restructuring taken and primarily revenues, was The significantly due decline to by operating segment from savings facilities manufacturing at operating last capacity offset year. somewhat actions lower lower in product income

costs in related judgment, income XXXX, a $XX.X appeal. segment not operating intend which includes the $XX.X we first Corporate litigation an of intellectual and million loss were included quarter to in which other property million to

to Higher same compensation to costs as our other to retain corporate the compared quarter costs, the and attributed expenses down, last top higher higher year. and and administrative set

costs to back non-GAAP Excluding results. due $XX.X higher an added administrative quarter Corporate first primarily year, the in quarter were XXXX, our in XX compensation million in same and of last costs. other million, charges increase the to of

basis GAAP gross XX.X%, profit same XXX quarter year Slide XX to results. to as to million. XX.X%. $XXX.X Adjusted first shows The compared points quarter declined last Sensata’s gross the margins XXXX declined

gross at ability align were primarily our running limited in employees, to to cost demand. margin cost and profit government decline due our to our restrictions, safeguard lower productivity from capacity, and manufacturing significantly headwinds revenues, decline facilities elevated to which in local lower altogether The market our

electrification. megatrend increase areas We wins development execute design growth and with new to programs, smart spend primarily business continue connected, to on and

actions investment, as in to savings rates. changes due R&D were foreign exchange to from down and costs the Despite the same X.X%, repositioning higher year, last compared quarter favorable

million, to the compensation $X.X increase. talent the Higher quarter costs, the retain increase last primary or a or incentive in year, was X.X% to compared SG&A top same driver of as

income prior down As quarter. to XX.X% result a operating adjusted compared year the was

as $X.XX first the increased EPS compared a prior rate adjusted to tax Our tax XX.X% to of profit finally as points, adjusted basis was present the $X.XX before And XXX primarily year, due compared down or jurisdictional XXXX. profit to mix. quarter,

types we are during revenue. relative portion XX, of a that slide The majority cost financial On provide in nature. productivity rate continuous and for of improvements. reduced up span, our costs our These the product XXXX and direct The material make scale is costs data, breakdown structure their variable net and sized purchases power with of cost largest by to types through which are revenue operating and supplies. labor directly wages, design

some variable as These and the revenue operating specific outcome. items utilities. management to enterprise but drive costs salaries extent leases services Private and action of primarily with in comprised nature, indirect and systems. more Some costs, to and include costs outside spend, this of These such to depreciation, are are facility our and support licensing structural related more costs scale benefits. require

protect the our higher rapid quarter XXXX, and the from employees. we normal, actions margins and decremental the In manage COVID-XX ability to than restricted costs first our to our our decline align saw operation to of our and pandemic demand limited as

direct us disrupted. Moreover, and despite locations, supply costs government dramatically to closures freight were pay required as chains mandates in labor to our certain continue logistics increased plant

our anticipated We’ve quarter of actions the revenue. lower costs number to taken second the into given strong reduce a going

the with XX% and employee regional furloughs base labor across indirect quarter have achieve reduced For to population. our country-specific for savings across implemented a similar and line example, managers we as in by roles during the salaries Jeff mentioned,

examining they We are prioritized also operating are ensure closely appropriately. all our of to costs

to We actions $XX savings expect quarter. these in million to cost million generate second during approximately the $XX

and expense, note It’s as operating total depreciation X% such to compensation. costs amortization of also important that expense non-cash, approximately are our equity

while actively we we’re short, we to invest facing all the to in structure of impact continuing our for value manage of the and stakeholders. are challenges our and and declines business the future, anticipating, to our managing cost create In increasing and experiencing operating end-market our people, are

net X.X ability X.X steadily manage sheet. its $X.X generation XXXX reflecting down Slide and down and effective our strong to revolving net at of XX balance which from deployment. times declined today, demonstrates the billion on end capital leverage the drawn has leverage Sensata’s Having ratio, from to line we on $XXX quarter second our cash of with credit million X, the enter April in cash

our when to of and unsecured position and our buffer not the liquidity to covenants maturity becomes XXXX are market until substantial we through our the leveraged is $XXX note outstanding adapt have debt and We first confident to debt million Consequently manage and due. agreements, environment. our current our the ability about October

was quarter first or flow of of XX% the adjusted net which is last to income year. same quarter the XX% cash net Free adjusted in when improvement income, $XX compared dramatic million a during of XXXX

million $XXX for to reducing by are XXXX our financial the We capital to improve to $XXX year flexibility. expenditures $XX million full further million

As announced our uncertain COVID-XX guidance with we earlier our the remains year month, of negative this the a changing on full impact highly pandemic unpredictable. and as business withdrawn have

first XXXX revenue be current of XXXX. the However, quarter down of of quarter demand, in second indicators for will based on likely the significantly

our future they that On future slide global products decline solutions. is automotive a automotive full second XX% for primary in and I assess for decline the on production source number quarter are of our to help we show XX, production. Currently year. and track demand for information a XX% economic predicting indicators IHS the

get communicate in auto our customers North view market. demand and with on closures plant the future to expectations, week America our of which In influenced production addition, Each of we routinely track alignment strongly automotive million approximately has revenue to four five Sensata. estimate regions in down these to that weeks. production shut for $XX average line an worth We OEMs the second during will of quarter, auto and automotive Europe in their

heavy off-road to business, our LMC help use production vehicle and as future levels. us third-party forecasts various such from For we firms production understand

quarter, LMC is projecting rates. decline For second North A XX% the production in a Class America

serve, economic machinery, correlated for products. to we our markets form include industrial to are the HVR load view them demand evaluate factors, customers from and also inventory farm the and the of which gauge These statements indicators they strongly our freight and HVR believe customers health sales market. to We ratios, and indicators our our also features, ag construction in production, helped sectors, public permits, building crop of the large and

our industrial For in starts, regional revenue. evaluate we a PMI industrial business, for housing historical demand strong and correlation develop data GDP given there’s forecast our view with forward-looking industrial and

expectations and for future defense our are of OEM passenger good flown and indicators aerospace, aerospace miles for products commercial services. For future demand aftermarket and production

lower In and and relating $XX production by revenue February, our operating expect of we XXXX. $XX million approximately will to by lower profit a the quarter in COVID-XX million demand our first

estimates experienced as predicted to a revenue both and twice in we Those of worldwide. as operating we what COVID-XX drop profit spread roughly proved of insufficient be

that needs levels of coming serve the efforts Until to and over to align a quarters, sense anticipate other demand good our our it to ensuring costs, develop our profit, able that we customers. the With employees to metrics. we difficult have we will of continue revenue, and for our are protect is to while operating future said, levels project normalize accurately we financial demand,

we operating comments are in times. Jeff’s echo unprecedented that I’ll closing, In

have has fortunate and this organization, that our to meet crisis we as We’re employees the challenges that are presented. an healthy risen

financial from financial currently emerges of guidance a all are provide we While working for to we comprehensive more time the XXXX, position. cannot this in stronger diligently Sensata ensure remainder

Jeff I’ll turn remarks. for summary to call the back

Jeff Cote

Paul. you, Thank

want few on Q&A, messages to I XX. that wrap-up turning Before with key show slide I a to

continue our our are opportunities. We of critical that actively against customers to and end against all prioritize and markets changing balanced ensure monitor to resources forecast growth

customers. to protect match but only manufacturing We flows, demand are from adjusting our not to also employees,

year face. outgrowing into and conditions end highly outgrowth at we the We deliver confident this end remain have We effective ability market to been our matter markets, future. no our in what attractive

which performance continue to We resilient model. financial solid demonstrates deliver Sensata’s cash flow

to we initiatives. in progress and investments mega We our growth excellent plan other continue trends are making front. on And this

provide to through market continue And believe the lastly, further M&A. creating bolt-on overall to opportunities may that strengthen value environment interesting our portfolio we

the remains priority health safety first Our our employees. and of

is stronger from position period long strong. our relationships will to We company. This as standing emerge allow our have with a of customers, us crisis financial this position

Now, I’d back like to turn call over to Jacob. the

Jacob Sayer

Thank you.

ask yourself number Given the please if do limit back to for to of and follow-ups you large permits. going the I’ll try then is roster. listeners each time one circle call. QA what on the to assemble we’re to question Keith, of


Yes, thank you.

first question-and-answer Bank [Operator We will question And Instructions] now session. Lynch. Wamsi Mohan from comes with America the begin Merrill the of

Wamsi Mohan

bit between versus a a changed if know and on comment maybe how morning. Yes. good little some that two cycles financial maybe Thank guys cycle the different. the can this peak or Sensata you, have Hey, you Jeff, little talk being you crisis, the I performance talk you you a in margin the decrementals little of trough about view contrast about can bit things

driving what’s know, you. You Thank that?

Jeff Cote

great Wamsi. the for That’s Thanks Yeah. question.

we’re market where different, more that from geographic, think we’re a end standpoint. diversified business, category both is product an I

we’re at So we important where area where ‘XX and from ‘XX. different that’s were an very

we leveraged than less obviously, much were in. ‘XX. ‘XX, We’re

equity-owned lot than sheet, of we have on debt were private today sure. we a and we IPO, fair our Before our had amount for a more balance

that areas which focus we cash the over costs to very our drive very flow business. overall capital true to profile. on terms business. our demonstrated quite continue variable also do low characteristics I very our a needed has applications, in in margin And we’ve amount are hard mission critical model, important. went the fixed of stayed to to are so have in think Paul we same similar cost the where still We are our of

us things this, the the cycle other around we’re is to of do to that allow commitments. a this that our where come market do out stronger the company to during will we think that. same To I area and need

question. I on my are one. those So that the appreciate thoughts


And next comes Chatterjee question JPMorgan. you. from with Thank Samik the

Samik Chatterjee

question. with this the market of for any for end Thanks there? taking given I to the material or slowdown launch that kind of wanted morning. disruption, plans what you of back the good check current having Hi, half my launch on but the is you understanding point, Jeff, seeing in impact are conditions cadence, at

time at other the talk some seeing same and kind of are to have? or follow of is same the you What ease path of the regulations about kind there And in rollback follow countries kind any to recovery? emission the US, likely impact will that

Jeff Cote

Well, level bit Great. in hit then bit this Chawla little Paul his the I’ll a customers. a give ask, one, a with I’ll terms he’s from ground high seeing what to commentary little of on

platforms. we’ve you direct the how what our to also least quarter around with first in of around in the for nature you of outgrowth. at terms to produced the would of That our year the and will at customers outgrowth should look first quarter, that, my in of prepared the launch I balance comments new suggest sort associated confidence continued

change We’re not very this. seeing confident. perspective on them feel continuing to their And we’re

regulation There some question any let, push emissions with you terms a of factors associated change I’ll push mentioned. may but be long Paul meaningful associated we’re term to with things collaborate that other three, inability month normally or outs not and the seeing the that address two folks or outs in Chawla they would, outlook. do

Paul Chawla

you, Paul Thank This Jeff. morning. Good is Chawla.

In had and pull in seeing on strong we happening. on in landscape major not are change carries any that still very us. correctly National QX the of for Jeff X said, said, China content As front we

in will the same the the their COX seeing are Europe, of We India pay. four the - BS-VI. have around potential despite And delays penalties discussions in of industry also to some

not launches we’re in content. delays, some or anything there’re though Even seeing

years, six electrification and normal. model still business is and we’re by vehicles seeing facelifts in area, Some could to pull two very be shifting strong But of especially platforms months. the

Samik Chatterjee

Great. Thank you.


Thank question Morgan Hettenbach Stanley. you. the comes with And next Craig from

Craig Hettenbach

that expect takes Understanding Yes. quarter. margin? not specific op a last the Anything terms you’d in but kind operating Thank XX.X% from guidance, in to at margin the puts think you. range kind and coming of adjustment of looking of adjusted about just you’re providing of us quarters

Jeff Cote

some great. you So, mind wouldn’t that, be hitting Paul Vasington, that’d on if points about

Paul Vasington


big that’s we’ve our discretionary taking prepared pay what – fact QX we’re And the that think expenses, reduce we’re that’s making sorry cost point to structures I is through actions not I’m our any remarks in operating in and that in watching cuts, here made reducing spend the QX. the furloughs critical. to

forward, same to we to other achieve structure anticipate all align to that we’re going and tools we’re the look look As outcome. to continue that to to applying our going maybe demand tools, cost the see

Craig Hettenbach

Thank you. Got it.

Jeff Cote

Craig. Thanks,


from And the you. Thank with Daryanani comes next question Amit Evercore.

Amit Daryanani

my Thanks to – revenues, as so go for taking we puts see What can maybe think the what on forward? year-over-year that I quarter and about production the revenue, takes we basis. look but point, question. to when I a guess, a question, comparable RSS June your are your numbers like on

have this your specifically, improve that at and revenue system June very of to trough point. talked being And post lot belief a that, the peers you would about endorse starting

Jeff Cote

provided, what given quotes for and forecasters upon forecasted market, we’re instance, the automotive of year to from that so expecting the and be we Yeah. Amit, great question. rate. from Based that the full is the the some down in QX is – clearly dramatically QX a hearing third-party recovery

we our customers. third-party Obviously, those we forecasts, talked at look with

quarter the what’s customers, will or six down. second specifics down production their with them our you associated five at in If be of are look four happening weeks, quarters, a lot shutting of for the around many

customers associated which measures, continued with expect see our impact we those, force we unless so quarantine to would things continue And to recovery.

our be asked, more that which any as quarter. I we’ll that demand is Craig what think the looking to and profile, a the that, obviously the opposed question back to outlook depressed is to in structure terms of big cost relates question that to normalized given align

better that that Thanks our be engagement at parties well activity, of forth as out and as monitor as So that’s upon we’ll based that, QX customers with come the will to that still and our what where be question. judge for QX. continue would rates sort to the lowest look the we well would of view third are forecasting so


Thank you.

comes Goldman Delaney question from with Next Sachs. Mark

Mark Delaney

pre-COVID question. to morning. inside can in globally, on in of for China order the if And China and terms are translated very orders thanks comment seeing Yes. Good what’s company the as taking hoping on and specifically recent comparing provide much if an I the seen could in into orders you how also update was then levels.

Jeff Cote

for the thanks question. Mark,

discussions So very and orders with I’ll regarding bit Nargolwala in high of amplify ask give Vineet commentary then to terms little a some level I’ll customers.

fill all in is quote and determined shut not fill for them been think reliable their down to right are tend I measure is what And rate with us customers than from other we’ve quarter. to attention - we rate working now. think through that’s the I matters, And very rate on manage other that. we’ve their know fill you a given

because in building can was them built so inventory sure didn’t customers see But and you certainly, to that response ready get the some first forth our because quick built seeds enough. of inventory we due is shut some their that it quarter, make recovery, EDI didn’t for of inventory that or they’re off to happen

of you customers some of response very a color time. of and time a terms we’re fill forth. of decline more a Vineet the so so don’t significant terms provide rate little hearing our was period short and bit in why This took terms very in from in what

Vineet Nargolwala

This everybody. morning, Nargolwala. Good Jeff. Vineet is Sure,

be to be pretty our – it’s markets as demand as to pretty continue patterns we uncertain. volatile and outlined, the continue So end Jeff

the China we As markets it back look be continue normal seeing though regionally, out challenged. at come China are to of export we to

gradual phased stages continue their Our in plants manner. of lockdown to customers and various be of a Europe North in America and plans with in reopening

are production affecting We which in significant customers our seeing overall the chain, plans. is also supply disruptions also

very in Despite the and with engaged be this, operations, to of state demand. we continue understanding customers our of terms ultimately

As we come historicals. up continuing think shape to clear not the look is be our to follow customers the the like. industrial books, especially markets, and relative tonight about order in But is on does is how once back pretty what demand stable our what they’re our

be to customers channel the some the ready some inventory are of product an From plants standpoint, when we for reopen. buildup seeing inventory levels as in took

the you. But that reopen online. on expect pattern to support our new as come as plants and work We comes Thank to the till draw providing demand will with into business their and clients normalized the they opportunities continue following customers down we quarter, them back view. over


you. Thank Capital. question the from Loop Shawn next comes with Harrison And

Shawn Harrison

then that Hi. The benefits basis Good A of the XXX that or of is any outgrowth, a and adjusted? quick activity pre-buy morning. from does clarification, long-term the include question. points

or of sought And this if out incremental other seeing come just downturn market recession? you opportunities out during fulfill unable demand any as either executing that to wondering some maybe in this outgrow you’re see share kind are can suppliers some here then of we second,

Jeff Cote


then the So can Paul share let on market Vasington question the on and touch me hit outgrowth.

You we’re doesn’t dramatically, from shift long-cycle that know our business. share business

a functionality with applications into enable allow our designed systems that the that’s the go and We’re lot work customers, there’s of to done and our into. to engineering we products

are were some there markets shorter opportunity of most serve not there’s end So dramatically. end of more markets, to our shift. our to share cycle, small an where pockets ship there that we happen tends In

the that allows we’re of times period their or weathering is to to look whether time, a we’re over difficult very these financial not during that. us observing partners. of build the key long here that And stability that’s them. I what longstanding remember customers to and look they these customers storm And relationships with think continue to

to our shift put And work established continue their times. do to customers. on that, you decades so work our in in been the they they’ll what and years for We’ll we’ll no them these for XXX the so with outgrowth but these more frequently as question? of relationships customers thumb with we’ve major that’s a certainly tough through opportunity, opportunity. opportunity, with the the viewing we’re we’ve scale want hit we around company, next as share, biggest others pick continue choose on of for in terms the Paul, terms who to more us than And

Paul Vasington

in and automotive building does China little bit would in outgrowth Yeah. but include incremental growth the and Quickly mostly a not points be inventory, occurred inventory building the basis and that of Europe. XXX

Jeff Cote

Shawn. Thanks,


And question Deepa Wells you. Raghavan with Thank the next from comes Fargo.

Deepa Raghavan

is a XXX Jeff, sensors I than outperformance. morning. had which vehicle through by – rough the That X product in driven et Thank maybe good me, and a question itself relatedly? overweight maybe mean but right? hiccups any category updated the million maybe that and you pre-buy quarter math, on your that supply all you indicated I base to roughly estimate is even can cetera, X - million no that he that being in is way, PPE Can work, by help XXX,XXX China, indicate An vehicles or automotive color the that production that think us you. for equal, bps the of provide talk your help XXX,XXX bridge seems anything vehicles maybe between more difference can Hey, even you itself pre-buy is a versus was helpful?

Jeff Cote


to Paul what Let or hit you’re terms anything please me – in this it. me wrong and try seeing, high correct I of then get if level amplify

It’s like, the so first So inventory is comparing to revenue we’re the magnitude a geographically looking across little range mix customers levels is production let right? look and customers production right that that a, a of bit. at because of what in this at quantify and our me not of we’ve wide we’re actual precise, this observed

associated we’re of So about This points $XX We’ve we’ve the $XX mentioned. that Paul basis Right? built market amount XXX not Vasington automotive to of getting amount. inventory. forecasted not be a that huge million million x so specifics build of that to inventory with

believed also in largely that We’ve that’s China.

the raw at it in about might or America. at to translates you Europe which That per half ready continue a in And and material million what is up so is vehicle again may look inventory not content in units. it North just vehicles, so when China, But expand. have of to been to in they customers our ended have be could it about

would of inventory across have of various thoughts. you world. connect my and we Paul the in could Maybe the markets this seeing to what that those be market end days so terms sort we’re And

Paul Chawla

So Paul Chawla here. Morning, guys.

We inventory not due are with down units. the million where it’s highest is do at over six seeing peak the on and rate to on but but have some side to sales the reduce next that has level inventory we’re consumers increases respect been in quantity of North months. China. It the America gone we higher X.X to is will slowed dilute it it’s that’s run been believe weeks. we also up, used the in And seven morbidity slight the to, that historically again last – six,

being dealerships believe a customers adopting our up that next been strategies I as start making for comeback the this our correctly peaks - in they place, customers not to dilute exactly the side have when at that supply and inventory around had disruptive, to raw in mixed production Jeff, quarters. knowing be So think the they ready of will with. said on that We case - both sure is in these do through two back comes material are going is and enough in chain as


question from with Thank you. [ph]. Fox And the next comes Fox Advisors Steven

Unidentified Analyst

sort China Good you’ve know, normal but about, from or just But talked to week. comments. the where production little returning to say today still a to confused by of last a I standpoint, relative morning. - is Thanks. production a you little trying

know you New inventory know, can the of seems does lot normal. questions mean like seem What producing of they’re produce, in you’ve terms And though demand, it you relative, Year like doesn’t it factories a even there’s that raised. pre-Chinese a

a it. of, help you. bit, us that he So just, could little Thank sort if I appreciate understand

Jeff Cote

that a yeah - good that’s question. Yeah,

the we So, going our have and in automotive terms saw to in think to March, strong where a markets March good number market, but very we all was across in may back that’s Paul be. of in things pretty China, specific is of end strong the of terms come exact indication quite QX

at other but we the just the we’re there, engineering in orders a as also looking manufacturing customer presence of from in on you terms business China. a of looking have from, standpoint, we’re standpoint, a at significant people what number factors ground know and from both of flow Obviously, also

And from we by they’re no but normal, means to certainly are. are where they significantly back advanced

in issued to purchases. major in incentives license We’re relaxing plates guess some also other would is what cities form seeing it, call around of incent the and but are more you that I things rules

none There impact are can plates a has that that the certainly issued, when of which around incentives demand. overall vehicle that has a you where aware on but number other in I’m the relaxed be of regulation of government strong are they can imagine launched yet license works, pretty

certainly we be to we’re more versus but it of seems markets So serve, look calling seeing. listen, what when at this not we we’re it out China in China other than robust that yet much

do? you add please if you’d like this, Vineet or Paul have to anything, to

Paul Vasington

points two Just here.

sales there’s You’re is Wuhan, February. was local up the but right, definitely down team good there, there. retail dealership actually some year-over-year than reopen, sales turning better the March and pick was out

and monitoring said as incentives. is incentives the Jeff We’re one two local factors incentives, government dealership

But transportation post-COVID could consumers also public an and of now potential transportation. means prioritizing where individual a less trend again, be using

we’re watching demand back they and whether over quarters. the three a So two next bring stronger those should are things

Unidentified Analyst

very you Great color. much. Thank

Jeff Cote

Thanks. Sure.


Sheerin Matt question with Stifel. next comes from the And

Matt Sheerin

Yes. last we’re know for relatively for Thanks small had years I in a nice there. you’ve terms and demand but good mid-single-digit section. that’s going on impact the the seeing you, just on morning. aerospace few big what’s a I to of obviously, growth segment ask about wanted there. And

really seeing are And anytime talking signs there. about your any peers recovery of not also soon

Jeff? what So could you and seeing talk about your footprint you’re there

Jeff Cote


high So, end then right passenger in now. then year troubled bit it an can all have down color. very that’s who and give a you order market are It’s weighed markets. or but The also book, a great give quite business this end little that a miles I’ll Vineet, when always business date some more has level runs XX is

and going back what impact we’re I planes, recovered believe forth not associated back broadly, down term has at somewhere but North serve Europe environmental vary this able that might to keep it America are has China recovered systems China/Asia of to whereas more might as would comes so to, with and levels around the closely dramatically be on very and be again to pre-COVID longer looking back, XX% we market that be opportunities. enhanced where still

book order you of bit the color and we’re you little terms But provide seeing what why on would. more a Vineet if don’t

Vineet Nargolwala

everybody, again. Vineet Jeff. Sure, this Hi is

aerospace our So one broad three we business, is OEM. commercial segments, have

the is MRO. And is and second aftermarket third operations repair military. The or and defense maintenance and

strong in segment. Our resilience well. pretty Defense up that is we’re pretty seeing actually and Military holding business And

a book. strong term a got very from OEM standpoint, order Jeff out, As a pointed long it’s of type we’ve business commercial

And manufacturers airplane we’re both supporting the and the tiers. major

pretty a So the in around major terms we out than XXX what MAX impact in haven’t other public think well challenges, Boeing space, and pattern that’s I known really a the OEM seen far, already the what’s commercial was to order of there.

our factored was That plan. into already

We spares dramatically. less need we’re so are as an business down to is and maintenance impact hours impact aftermarket and to aftermarket seeing for come There our segment. an our seeing flight

we if speaking, continue to as you. see with monitor broadly our our space there closely and to space, long commercial very with think I Thank our tiers as in changes any But demand distributors and volume the to here. well work are that term


RBC the Capital Thank Markets. you. from Joe And of next Spak comes question

Joe Spak

variable circle more some in is Solutions Performance automated. are could major differences there the help Sensing costs back Thanks, if explain Sensing Solutions quarter, that the I morning. the factors of good just margin maybe wonder differential between Sensing and we detrimental in to

as seem that second also look margins be quarter, in like you the to sense detrimental be give that? you maybe And of what how a a guidepost about weeks worse March two the could think could to for indicating last of

Paul Vasington


between is a differences as service Sensing So, The as cost Performance business the structure well performance the costs Variable costs higher Solutions. and little are lower. there higher. variable Sensing bit in

we’re a to on fixed the switch and out variable, the influence to those volume, has semi impact laid profit to So try changes, out – so lower and costs. able page drop we variable able not to slide deck try mitigate down not and bigger or

in a in and in the successful past also Variable the costs and have we’ve out years through take be working to – to productivity initiatives costs year cost we But been designs very volume. the move continue future. continue those with will product and

the same time variable semi The And requires to initiatives. on in or those and that’s closed the incremental plant price duplicate able in – our piece changes. operating terms we’re should environment structural struggling being I really are engage do, to level with the what driving the the do. of why employees, costs the to our out. things that types ability the seeing our drive we’re higher all we chain, with management salaries normally supply improvement disruption say, paying that around we’re we’re real seeing this incurring with are takes the a productivity productivity terms drop and that costs do we to in of with productivity target It of to is And preventing to paying conditions, that’s bigger and the of we’re safeguard you’re plants restrictions in that

The higher has and we well see margin the as industrial heavy mix of quarter, vehicle some out businesses some in typically in business. business Sensing our Solutions as in also a drop headwinds the don’t given our significant

it we’re to out of – what seeing So that the tried depth on the volumes the decline the lay in We seeing greater in explains of the terms hopefully slides, were in transparency we’re provide it. margin that rate reduction that some –

Jeff Cote

around think QX anybody’s from to that are demand I But – don’t QX as be me well recording levels. to cost levels QX. normalized more little we profile. we’re Joe I Yes. And Paul going align point run sledding is let think add want to tough that company at hearing every bit on We that a that’s terms long-term normalized of structure If think was getting a I in rate. our forecasting

thinking we And cost as the align don’t structure a would we level. you’re more think what think look the reading at to look as in at this correctly level calling normalized and and so business, we’re like QX point I as I about that normalized QX ways think about we’re in that

that’s as forecasts for of year, of we question, where third new QX the party we balance the and obviously in there more think versus entered the seems Joe. evidenced where where going the but a a certainly expect normal it’s we But negative is lot terms of than the by the like year, would to we’re year end well. Thanks


Barclays. your Thank Johnson next comes Brian with you. from question And

Brian Johnson

out Can business you seeing your of, – talked are you us, you - your a once limit are in stronger. kind but cash give obviously, about coming reports about held opening, tell M&A that���s that thinking balance Yes, the you stabilize in deteriorate, any sales, than opportunities, have many. that certainly going if you sheet you better to next if could stock are up may leverage, going,

something So of the we the think that remainder over about can is year?

Jeff Cote

absolutely. Yeah,

keep the aim to definitely full. to going pipeline we’re So

think than where there there’s always expectations to market when this will As through go I expectations, quickly got knows equilibrium seller more a time, so align buyer like that a you’ve much there’s of eventually dislocation everyone process an occur. period

our the in mean want a be varying but now. are we identify coming That nothing pipeline quarters pipeline activity won’t to we more over very I there M&A But but things of pipeline sizes, doesn’t where the of opportunities clear in bolt-on right related there’s is that’s that. number opportunities, huge that type will the pursue size bite

I the doing think the to we’re business thing the continue at going, best those the but is to right flexibility to that to where business. on around interest financial in it’s our the same pursue sure make forward look time,

on been pipeline broadly the and and very So continuing slowdown diligently a it, work activity, in M&A posted. monitor to you we’ll there’s we’re keep more related clearly

Brian Johnson

deals Okay, thanks. type And can you with stock? do

Jeff Cote

we We the strong us would see do what terms think need the currency that to a available point we to position, activity. we’d currency, at preferred this cash for that deal in of deals. smaller to financial billion our in don’t as go stock $X.X with being With very that’s with

Brian Johnson

Okay, thanks.


Jefferies. The comes with David next question from you. Kelley Thank

David Kelley

morning. Hi, good

you supply disruptions seeing significant any the your if quickly, with provide Just volatile chain, some you’re how you’re navigating your could supplier? color environment and on there

Jeff Cote


chain The suppliers supply to And are. with we of terms we’ve suppliers. commentary been our engaging our absolutely, have exact we’re customers thing our that job chain. of all has with supply doing our Paul issues with same fabulous just customers the absolute them. engaged partners with provided has and dealing have been, same disrupted. to as They’re the we all Vineet of done and in So the team an how

significant had terms, assistance. our suppliers that so financial called for us any any of looking terms had have haven’t in we We changes large haven’t

Now we that’s that that. not won’t see to say

our critical But we’re, make very essential of activity. And we’re to continued parts, we’ve going our intact. shortages navigating chain we supply we’ve to do maintain sure been everything possible as

to a But the quite make lot of quite, we’ve teams been work sure But there’s nicely. of to able part to the it disruption around it manage world been And there. on through due happens. the

dramatically aspect down of large well of has as circumstances. chain been mentioned of shift portion modes more be logistics And jets. transport and a to is dramatically, would supply navigated other given we’ve trying transportation Paul the as the to appropriate as that disrupted it the that of well passenger with And logistics in belly that


Thank with Cowen. our Giordano question next you. comes And from Joe

Joe Giordano

questions. Hey, for my Thanks guys. taking

could. if to first Just real you wanted I clarify just quick something

my And question is, just mentioned business you the how relative given You and the then the and if aftermarket nature. into their about product how the could and total like final down are OEM they cost given big break arrow. assembly the narrow Defense the just those to nature your

through, what from a through of and is you. future in ability came light menu So normalize, just in view shift it decremental your that like that facilities? to does it distancing is capacity in mean social the and ideas like Thank here, put

Jeff Cote

you airline, aerospace impact the or let the second Yeah, if right. I’ve let the on sure, the me to model, social question operating specifics of question got the the will, And then, if I’ll hit business. on the so regarding distancing need

on start people of touched normalize thinking you do interesting, the that associated forth. more to what So the spent mass time we it’s about with and if fact is so end-markets Paul willing broadly, lot know on transit be a impact less things to our be will as would this

that XXX. the supply so will We checks in to where think because we’ve to terms and trends operate. if we’ve protocols of customers. be continue terms to security you put the know, post be already were instances of chain, like implemented you will required that place, a therefore that beneficial number our back measures Much us to continued And And there forth. of are in think beneficial in the to

sites. so been checks. temperature There of put terms regarding of of we’re And what in in habits washing are social place, our checks mass, people’s features in our, being in that distancing protocols wearing in have terms forth. our related of implemented a sights number and Loneliness screens in hands doing health

once them. you But I or a a things. those, to where in we breakdown business or do the meaningful to we’ll will I that way big different I nothing impacting norm navigate have to large we don’t way numbers additional cost supplies large business see people model. impacting the don’t be on aero? very get want we accustomed see people in those and of and when able to model be changes those coming a you and of changing is just are Clearly, so new dramatically But way implement think get when cost forth. protocols structure. structure out. it a Shift Do touch in site, some

Vineet Nargolwala

hi, Joe. Jeff. Sure, And

third MRO our aftermarket a a think to a Joe way we’re OEM our military roughly then about business, defense the third, business. is and with and So, third, commercial

Joe Giordano

guys. Thanks, Okay.

Vineet Nargolwala

Thank you.


Suva with next Citi question Jim Thank you. from Research. And Investment comes the

Jim Suva

you one I very much, have Thank just Jeff, question.

materials get automobiles Some about, a like back content working of or chain just hit that down talked just vehicles or bit dollar the trucks to does more build that little a some suppliers. for our I’m screen? wondering, pressuring prices the Thank their and doesn’t part efficiencies small such cost back just of you. Sabo reach it OEMs radar for the that to and supply have of

Jeff Cote


with volume long-term. folks that that know contracted concessions also associated commercial related think they we’ve I And us. our requirements with contracts So, have have often customers our

out Now, get every is its through we to win-win, figure in all granted, work in to a this. very can to company looking so environment together navigate a for partners that difficult

disruption that drop we of historically would working customers expect quite them terms made out the been upon need to getting be in of that with business based continue We they’ve to they their when through their well. in Certainly, with the able them able order of to rate. to we’ve it, product terms have and navigate that in concessions seen

that frozen That have the a fence take long-term terms but our fence was technically the answer. arrangement But forced contractually have was inventory, customers. could within right them we didn’t we believe that to quarter in we economic the order of with

seen contracts. the Jim. well we significant a from our customer impact there standpoint haven’t We do question, when Appreciate reasonably able historically significant see drops in financial volume fare we’re to

Jim Suva

you. Thank


you. Thank

Daryanani Evercore. is question from Next follow-up a from Amit

Amit Daryanani

follow-up the revenue if you. slice, you taking expectations controls restraint and place it flow And well? March governments don’t focused really June quarter, look know a two those that for if in I way by quick had that ones. this your margins slicer are back there’s quarter for I numbers Thank then on I versus you control would is missed like free from be as to to was couldn’t great. maybe would these the perhaps say two a incremental cash Thanks this guess guys. but delivered what really headwind in detrimental Paul, One, you was that [ph] it normal seeing guys

Jeff Cote

you take to Paul, want do that.

Paul Vasington

the Yeah, sure. for Thanks question.

restrictions full have the to that running to to with inability not incurring deal elevated employees were disruptions level the our So up we’re supply the down. was drop on dramatic, we’re chain, at and to costs I given range in were much mentioned distance drop the to seeing product they the seeing in lines on off know earlier, which closer social to moving costs the in the the in different volume higher as more XX% the is past depending XX% that seeing plans, the capacity. just the protect in out of The and the plants were now, we’re disruptions

revenue whole so and through in bunch our our be that that of drop driving a would that’s unusual past that performance why profit and the drop creating percent bigger unusual significant disruption decline volume that a All sake for you’re is is seeing decline experience. of at the volume is given

when We’ll and the to we the manage costs done As to to effectively. sites things more be fully as more those changes, do historically. operate will we plants sort of able structural able have to begin be able normalize, we are

Jeff Cote

and the me, our manage free capital. not a the free keen flow cash we focus there around a QX cash for structure, very flow structure, And that we making excuse question, did and guidance on from but helpful our expense on on be cost we standpoint, transparency have cash provide will qualitative working sure hopefully our

indirect the taken benefits benefits we’ve of in will reduce pay there. on cuts terms the forth side equation essentially, And a when the structure cost and take by reducing so and to the still cost number our cuts furloughs cash of steps XX% on of business about the the pay obviously net they’re because that basis people a that side,

question, And so that for quarter, the manage very we’re disruption aggressively Thanks cash Amit. focused on seeing. second the that flow the that given we we’re sure during making


you. we Wamsi from have follow-up of Merrill America Mohan And also Bank a Lynch with Thank

Wamsi Mohan

thanks up. Yes, follow the for taking

in seem I China. to if you be comments up we guide around can of I manufacturing also, conversion any over your cash Jeff utilization now give maybe they the rails some China more capital give cash versus CapEx us rate on missed us sites you. Just those of course go Thank and of but cycle at as there free the both way working some follow if out normalizing to and you’re lower so don’t this the managing on year flow, through things sense noted you know

Jeff Cote

you flow hit Utilization, about China, but utilization if utilization Paul cash the could point. dramatically In running quite I and locations XX% around around we’re great, question Yes, the obviously, significantly XX%, then the at that. the so other world the running world. lower different I’ll than we’re varies very hit say around would locations at

little of QX of our XX% in or every operating would is I smaller of it level of where then there demand. sites at some and in sites our say sites, hasn’t we larger at lower where a some better, that might a be that, running But one been some about everything’s our much instances bit as In see capacity. than

And, our again, governments we’ve to working rate sure run that us. been make need with customers at we the that local

a and we you caused chain So flow disruption we cash can don’t to the make that’s demand an raw sure deliver we and we’re revenue impact Paul, everything by to on supply that hit point. going us. see do to want

Paul Vasington

of we XX% very it $XX cash cash Wamsi, high, was good. QX pretty flow that free the talked is good flow QX, Sure. million rate the was in in that about was which

engaging on been they we’ve customers, with customers, far time. paying are So

We’ve collections terms disruptions haven’t seen any receipts. of major and in

things feel so, normal. stands pretty And it as now,

I for are XXs think so progressing the front. DSO that normal the was in was low on things about - quarter, fairly

Wamsi Mohan

you Thank


any now. that’s the to for Yes, you. Jacob Sayer like to Thank have questions for all We’d closing right we comments. return time

Jacob Sayer

be this for will the Investor XX. you on I’d Keith, all for joining like TMC call. this Sensata Virtual interest may and the in Thank to JPMorgan Conference Sensata. Thank morning. thank you. your participating everyone in for upcoming morning you joining us now end May us


has Thank you concluded. Thank attending conference now The presentation. you. for today’s

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