BHE Benchmark Electronics

Lisa Weeks Vice President-Strategy & Investor Relations
Jeff Benck President, Chief Executive Officer & Director
Roop Lakkaraju Chief Financial Officer & Executive Vice President
Jaeson Schmidt Lake Street
Anja Soderstrom Sidoti
Call transcript
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Good afternoon, and welcome to the Benchmark Electronics Third Quarter 2020 Earnings Conference 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 Lisa Weeks, Vice President of Strategy and Investor Relations. ahead. go Please

Lisa Weeks

and Benchmark's operator, for us joining Thank quarter thanks, XXXX for third earnings today you, everyone, call.

the website we available the Joining replay to this of at release earnings me provided and closed the highlighting After President; to have performance presentation. and the on for the a The following CEO and This Benck, GAAP our call is of a in appendix online advice earnings the presentation statements forward-looking has being will Investor the release today, our and market X Please third financial take webcast this afternoon reference Relations Roop as live, on presentation a company review online our Slide press are Lakkaraju, measures that call. a reconciliation Jeff well of be will moment issued under The release presentation. an in as section are we quarter, available non-GAAP and the prepared CFO. call. we the in

we call, forward-looking information. our will discuss During

forward-looking of SEC remarks may materially reminder, as Benchmark any the from risks the from pandemic, in no statements, of uncertainties COVID-XX of releases statements, which today's are and results undertakes a that involve and statements are to described press most notably our historical filings. statements. As any Actual fact and not forward-looking these update differ ongoing impact obligation

strategic midterm and an an with before and outlook conclude detailed quarter. financial a cash quarter the Jeff update up a discussion fourth wrap will call, on market results, by For by today's summary will our our balance our a will begin third with quarter sheet sector and Jeff Roop Q&A. of we call covering then model on discuss and summary initiatives third our including guidance.

presentation, in turn to over please Jeff If CEO, Benck. X you Slide to I our will the will turn call the

Jeff Benck

productivity. our XXX points our delivered non-GAAP QX, costs. operational and up from and to million safe in call for afternoon semi-cap quarter. million, during In efficiency, are share, was $XXX X.X% thanks the With basis are of part from I'm management non-GAAP go $X.XX pre away. COVID QX the today. believe improving they per We of and Improved to that healthy COVID pleased Good have focused you and report margin why which a will degree related rebounded earnings operations joining current After $X.X by couple essentially returned and normal they some of will likely believe not levels, new manufacturing to engineering decline our priority. challenging to which our population services quarters, improved completely protocols keep workplace we QX. levels, a healthy, force a operating to entire task safe of supported work amount improved per we all for staying gross our not our to revenue everyone of and COVID share COVID has been defense, This and sectors sequentially ensure to without remains includes hope productivity our incredible has supported times. employee telco resulted in costs which or strong demand and stringent Lisa. you, an maintain from X% which Thank and unprecedented $X.XX of results expense We profits top we for these

Benchmark team thanks turn customers. production solid of days logistical many this for to done of days global an want I from quarter XX QX. to thank the team, to through cycle in Our improved managing incredible challenges our Slide who's hard chain our in supply also to cash to our and continued continue Please support a operations entire of the support year work job conversion for for in all, their X. customers. All for our and quarter my XX

the QX, mentioned I where services focused in business the capabilities. to quarter of and breadth over were and from awarded of for go-to-market our that $XXX million that COVID-XX medical sector, another solutions continues testing bookings of lab-free we new strong In previously, exciting our utilize revenue. the Benchmark a engineering As future aligned Netherlands full in awarded should begun our has opportunities we rapid have a and complex One deliver facility. team represent we And to that DNANudge program device manufacturing production had

liability provide very DFX We a for to to with partner turned product are excited high has what manufacturing support to be DNANudge and swift out ramp.

pulmonary the also defense renal new military will a treatment with companies and were two vertical, services device our incorporate had solutions manufacturing be for optical other design that design communication wins product of radio a program awarded build an awarded secure a supporting modules we full an we aircrafts. and for computing, process a electronics. in siliscopes. and control box for In electronics and awarded diagnostic for hyperscale that We and monitoring In manufacturing applications. deployed we from and system In were were industrials, a new for new a awarded computing for customer customer, manufacturing for existing were the network a LIDAR generation award we new prototype outsourcing application, a

very favorable. both Our across for remains continued outsourcing manufacturing sectors the engineering we where to pipeline for strong and encouraged environment projects targeted continues about new the and business subsectors, wins, our be remain and prospect

the I'll quarter Roop to Now Roop? third over call discuss the to turn results.

Roop Lakkaraju

as expected flat I for third in market in everyone and QX, for were healthy. Medical COVID-XX stay sequentially Thank to therapies, on was ultrasound and you, devices. X% increase ventilators, products a X basis. $XXX demand a x-rays turn in families million such Slide to involved Total safe Benchmark by sequential hope Jeff, as revenue Please for and from moderating revenues quarter revenue continue our sector. their good afternoon.

which platforms customers. in Semi-cap defense New for connectivity, due quarter A&D devices, as XX% in we semi-cap our product muted and program in subsystems were which demand industry, revenues on quarter demand the to is products Conversely, up box, from third shifting softness and and declined XX% strong third the aerospace were for surveillance XX% encryption more year-over-year from from increased gas in remain flat towards commercial XXXX Industrial was digital strong awarded continued demand rents. revenues certain sequentially continued during such oil of XXXX across QX. and for approximately the was XX% XX% which DNANudge's revenues the the third diagnostic and were demand, quarter. diagnostic revenues, new quarter sequentially of revenue. our

center revenue. that customers demand computing commercial performance remains XX% from up markets satellite sequentially markets. for with the transportation XX% Telco data infrastructure quarter building addition, the traditional higher represented In computing were was products. muted from improved Overall, revenues storage markets, flat third and products. in infrastructure stable demand In in QX commercial demand high our of value support network and and

markets quarter revenues. of traditional represented Our XX% third

Our top customers represented XX of sales XX% the in third quarter.

X. you turn Slide If please to

$X.XX. share Our the quarter was for per GAAP earnings

costs related our we Our other business other and one-time to to To $X.X restructuring of million these results $X.X the to and exit included $X.X restructuring related $X.X insurance assets GAAP due of sites. restructuring million. and around recovered and have to one-time a activities related turbine event. are other related impairment sector are severance totaling date, costs our million QX machining. in our to costs remaining certain million, recovery various The $XXX,XXX ransomware XXXX A&D of decision items the of to line

Slide Turning X. to

points XXX was For QX, sequential basis increase. our gross non-GAAP margin X.X%,

in incurred the higher We productivity across was enabled $X.X versus During our related which that lower margin share revenues, improved million million cost approximately positively quarter estimate increased QX. quarter sites our approximately $X.X gross costs. per impacted and in by we the structure, $X.XX costs or leverage COVID COVID-XX across of sequential

Our million million and a SG&A an of increase was sequentially million, $XX.X of decrease $X.X year-over-year. $X.X

flat between XX.X%, is EPS was the margin. insurance than was the Non-GAAP $X.XX costs X%, lower of expected profits which to revenue increased as of recovery QX rate and non-GAAP our be around QX increase the will QX, In higher that globe. the non-GAAP and expect an ROIC X.X% was a margin QX. in in our was sequentially quarter X.X%. and the gross result QX relatively We distribution SG&A from and effective reported due for tax Operating

sequentially rate. cash and and X based our expense on non-GAAP flow balance on improved our interest performance, tax update net improved sheet. turn an of for summary Slide lower Our a to lower Please EPS operational

U.S. Our the cash available balance was $XXX million million at in XX, with September $XXX

used to support strong We flexibility provides capital our have continued future our for $X and billion expenditures. and million position capital to generated $X liquidity structure flow business, operations a manage from We our in cash strategy. to

$XXX million $XX Our accounts receivable $XXX $XXX Payables was were $XX prior the sequentially. and an at million quarter. at million million XX Contract $X Inventory from increase September XX. million down $XXX was June were XX million, quarter-over-quarter. September assets at million of down balance

cycle. Turning review our to cash Slide to XX conversion

accounts days customer XX, days, cash support of days Our improved were conversion by an to day deposits improved receivable help one three improved days improvement three overall six sequential days. and cycle days inventory

capital Slide a continue Turning quarterly XX to allocation pay of dividend update. million. approximately $X.X we cash to In for a QX,

review We There Slide quarterly for share expect to Tuning repurchases of continue were will in guidance. we QX, to no QX. a dividend. share quarter consider recurring the XX in cash opportunistically repurchase fourth XXXX restarting

from to million million. range to We expect $XXX revenue $XXX

temporarily had for estimated amortization operating review range assets a other employee of The of SG&A reductions for $XX that SG&A our our salaries that cost and does impact by reestablishment the continued in his further costs. in been We to purposes. will offset will the Implied that million X.X% of margins modeling X.X% X.X% exclude range to X% the margin be provided QX reduced. certain following restructuring reduced expect $XX will to the and This guidance range is guidance comments, Jeff gross between intangible million. contemplates and travel

incur We $X.X expect of $X.X QX to million. other non-recurring costs to in million restructuring approximately and

will our of million, cash approximately to diluted future expected will expenses expense share primarily estimate net be year and We growth. million we of for interest as to or is to earnings our Other be $X.XX capacity prioritize investments $X.XX year non-GAAP which the be CapEx for $XX $X.XX. to expected million is support customers the $X.X to that to flow million fiscal new to from $XX outstanding XXXX. approximately we range $XX million, debt. expand our Our per $XX production generate related in for midpoint operations is

and will COVID-XX. Jeff? Jeff. to rate average into between QX will effective for of This QX, around because The are expected We for the guidance now changes conditions constraints turn XX% be customers. to significant our due market for to to for also quarter assumes takes tax end of XX.X XX% the our network. known assumes all or expect million. operations our global back I Guidance call interruptions supply distribution consideration income non-GAAP base, further no shares that weighted the no material

Jeff Benck

Thanks update. that Roop for

related The for trauma equipment additional from Following Roop’s telco guidance should geopolitical color therapeutic wanted be our their more the line uptrend signals, I are shown to economic QX environment. in fourth on view on do XX. for we we COVID-XX expect as and programs on industrials demand and of the stronger cautious manufacturing comments QX in as our diagnostic increased to on year, given revenue defense, We surgical sector results increasing elective provide level. seasonal anticipated pivot fourth the QX with this customers expect medical, devices. and quarter, revenues demand not in and Overall a in from Slide offset declines by quarter, to new in demand

Now turning to sector. the medical

reductions of in products many fight reallocated with half the and this elective COVID. core in markets as associated and manufacturing existing we orthopedic capacity year, sales first against their of customers trauma the demand renal in surgeries, saw new the our customers and cardiac, and During medical our

we year next As programs therapy ramp year. production. the of ZOLL non-COVID benchmark us for with fourth reported, a Medical first recovery expected for that in existing half the expected demand sector increase until the in capital demand of customers, new in with year index see the strong electronics start manufacturing of precision equipment a In demand to QX. will stable in one than support corresponding remain and and remains growth In this demand isn’t confidence year This another remain semiconductor outlook. gives but for after capital predicting anticipated medical We our sector devices, is stronger be products, support to medical our manufacturing further along well machining COVID-XX expected next quarter, to cardiac another as recovery declining rapid XXXX. growth semi-cap, advanced sector. equipment enlisted capability for QX, the is key to ventilator positioned semiconductor This

outlook. sector A&D the to Moving

and products as programs defense XX% defense of funded Armed and is aerospace sector demand approximately QX across commercial portfolio aerospace United outlook. strong States on across related in the we support XX% the based remains revenue Our XXXX many comprised offerings Forces. Defense

commercial limited We our in first year in are and which anticipating demand XXXX. XXXX, significantly fiscal programs, in in recovery have half declined aircraft QX have a

product work in we remote higher QX earlier, half, trend As offset are for In number but telco enterprise performance are industrials some Roop soft we the oil in increase building telco in with being computing as and not infrastructure weakness the increased network large orders Despite where continues. applications degree see seen projects infrastructure projects. in global in to the persistent value as demand, to transportation new for and flight demand second in and do for overall our markets, in engineering computing have continue stable bandwidth expected for industrials stable gas After expect an a our remains we from services. an services demand of customers High number mentioned commercial and delayed. continued across demand uptick satellite from and programs greater in many Overall, QX. a be customers rebound the nice customer remain strong across base. data need projects in our an the QX,

this Roop in gross As guidance revenue achieve to sector margins shared QX. on with our track forecast, least at mix we X% remain in and

Now, you please XX. to Slide if turn

all share that We and Benchmark key focused teams common XXXX. strategic and extended to for progress goal. continue laid on updates of steady on review to with is staff ensure set our of out progress regularly, make our a initiatives we I My we

a focus at top customer is priority First, Benchmark.

This level. to We the customer engagement happy feedback relationships we long-term foundation business. most deliberate I’m at This remains team of which our ways with growing sector proposition. and be customers are business using customer how future. in organization for to easier and and do a to a technology centric strategic optimize we operational our are organization. is business approach customer working selecting cornerstones can model building are to to with strategies, an many report attention as With to important the focus in high performance find markets to valuable our roadmaps inform aligned we our have make In coupled our invest vertical our growth accounts, an and value satisfaction, on the it help our more in sub

selecting markets expand these and services our out competitors, scale thesis that win Our to other strategic each full and objective the our well investment the includes manufacturing within by breadth prospective higher capabilities. differentiate is of with sectors. This even Benchmark is innovations customers, customers focus to rates. of internal This against against playing across value in increase technology

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Next, efficiencies. we enterprise continue to drive

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intense improved rigorous a through have G&A focus expense on and investment costs activities project prioritization. we on our controlling addition, and and focus processes, In centralization management

reshaping our are SG&A We landscape.

at end occur has The finance with are million, we IT, enable invested higher expenses the year. year, this work HR, as requires targeting yielding in costs furloughs, which to restructuring even our mentioned shared in salary to lower $XXX SG&A Roop compensation. next centralization activities, temporary For or will cuts other services Unfortunately, higher and quarter. below does we hard travel corporate this are next and variable have

close our talent Finally, I on shifting and engaging want with culture. to initiative our

starts cultural great workforce a that has Benchmark foundation a said, with customers. to for who committed wants I’ve our deliver As

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For technology Benchmark, thinking, requires creative companies by fueled diversity. like areas innovation, all fresh competitiveness and ideas

the these value now key at splits. the at arrival our and compound accounts between are please a that uncertainty XXXX. growing over macroeconomic midterm markets on X% current and If can pivoting new the Setting remains year strategic great annual work aside, through customers. The now Slide and revenue selection believe next ramping value for resulting programs The higher customer we a XX. the model growth formed we by priorities perform The target right and had markets grow turn our higher strategy. to our COVID attentive years, with the we foundation setting and our our mix new targeted two at my target company you to start traditional rate

and some aerospace While headwinds revenue our speak growth the expectations we’re our oil wins. recession, recent gas and the our softness decline outsourcing pandemic due in to pretty to and other in bookings overcoming in markets install significant our strength demand and base

business, footprint, operational the our we of growth and of expect initiatives current recovery in X.X%. current accelerate customer XXXX range our and X.X% to new the in ongoing global success our install this are further the base. economy and picks up wind As gross excellence with targeting and momentum we later With mix margins can of XXXX, through our

SG&A expense overhead On effectively. to to and I’m is line, taken to that our the and support customers have necessary efficient an access the organization employees effective management drive committed right-sized

expands X.X% investments the to revenue. keep X.X%. expenses than aligned needs non-GAAP faster target to future between our that With greater we be range operating we margin grow we The and company will earnings resulting revenue this comfortable can As growth. and capabilities, model, feel will

in improvement improve, deal where is confident about am in margins opportunities the our growth we excited employees, see resulting in end ability we and I operating team’s and operator pipeline markets, diverse incremental rate our our As ROIC. that, to to Q&A. And capitalize will on the wind remain on Operator? call increasing, value our for over increase shareholders. turn with to and I ongoing remain customers, our initiatives focused executing now to the conduct our


Jaeson Instructions] from And comes of [Operator ahead. Lake first our go Street. Please Schmidt question

Jaeson Schmidt

Hey, for moving given seen hence want guys. segments, months different mentioned has you bit QX. you know my visibility? being of business in changed from taking the ago? Or to in can a you comment won’t any Thanks significant why Jeff, cautious three there’s just that you visibility how variety just parts I just more have customers change questions. a uptake your start, than are I that seasonal see discuss, overall but your

Jeff Benck

Jaeson. Thanks, Yes. you. to hear from Good

start few pretty But as – softness I’ll would. think, and had landed and a movement, inventories and did was the little an in about of QX, and with felt that whereas the What What we of certainly that that some we some continued in folks, than but upside, that was still we was some quite of there’s we at certainly, of products in up I Semi-Cap that we we QX. specific months QX strengthen absolutely moving thought we a look of Defense you’re of crazy bit where to we that quarter some more medical that are end, was demand probably and in parts not see quite the different continue and a and right, end, few stabilization build a to little do. lot way and QX, we needed it in of enjoyed will there it part level coming and some see of a saying – products then a to what it segments. fourth they with COVID staying fluctuation, in bit we seen those probably little the ago, we

I think decent to it. we’re getting visibility

I just not bigger being QX seasonal it it’s the last you And that’s our what is that with complete would be more in a driver. like at line when guide a over but certainly causes, So couple look surprise, the higher shifted than bit a what say this And a might months. that’s QX.

only We’re happening for ramping, but medical still of great instead us we’re in on not that XXXX. and that’ll win, – bullish a wins really have be more

Jaeson Schmidt

I for that, the related And projects with Okay. mean, the medical then sticking for you starting adjacent to business, are see build going COVID XXXX? just backup or off funnel COVID

Jeff Benck

would have some they’ve a point, I we we excited business medical great have Europe built highlighted XX in when and exciting to very that say we and we’ve on test. DnaNudge rapid point-of-care, and products that. right and COVID a and we’ve got super diverse talked fight you a about about That’s position – COVID non – as new therapeutic

did resort. are So of And like course that. number ventilators as for right. ventilators treatment examples multiple build to has and going a last a customers shifted, the COVID people ventilators, of for there’s We

and area back to an seen we’ve demand levels. of a down were that’s was ton and where So up people normal that there stores come building

talked So broadly some a that. products, I devices. moving mobile our business kind ultrasound new X-Ray everything have diagnostic medical renal we and product, there’s though, about winning of think from When about I other been devices, MRIs, within new really

COVID activity put didn’t – sustaining. necessarily have see second set necessarily products some that upside But of the this of under provide year. going wouldn’t you just we was think to in are we a banner. a COVID half So diverse very knew that I the that, of we

the for more rooms, Year. of New new year be I we incremental emergency think right, next emergency as hopefully, in room nice things probably but the products much COVID as, of people business keep of the diagnostic some out could us, not

Jaeson Schmidt

queue. just figure or under million very for helpful. correct? changes? a me, use back to SG&A and that last the goal $XXX $X.X future to foreseeable includes that something in costs one costs, QX. then into next No, jump good the COVID-related for COVID-related Okay. until And I'll relatedly, million Is in just year, be any for And that's just potential

Roop Lakkaraju

Good is to you. talk this Jaeson, Yes. to Roop.

So your we'd costs, I'll $XXX And cetera. some with characterize normal of latter first. et new start would what that million include of cleaning or characterize right, protocol, as I'd amount sort

– So annually. that includes that that $XXX within million about

Jaeson Schmidt

$X.X million.

Roop Lakkaraju

$XXX higher. we probably under million no. We No, million annual as million a down. we'd QX. to came move it'll SG&A normalize Maybe cost. is little The forward. is It think $X.X $XXX,XXX million probably than $X $X lower bit Obviously, just expect. where

Jaeson Schmidt

Okay. Thanks guys. lot a

Roop Lakkaraju

worries. No Jason. Thanks,


question Anja next Sidoti. go of Our from ahead. Please comes Soderstrom

Anja Soderstrom

Hi you questions. for taking everyone. Thank my

So, said, half? just in the it ramping with more in second that with you more around is you production or an your might medical, XXXX. XXXX, elective event to Will comments follow-up on see related be be that early

Jeff Benck

it’s how of back and a performs, the elective of in other think XXXX. overall less not to surgeries pretty we’d a growth year to and have of the and in add will those it, of on the I’ll It’s half. us as at we that’s will us activities, we that start economy at timing, I fruition see we’re kind believe and some look I little macro when this of year Roop we are on of funny. next and of end they a the next at it’s We’ve will obviously sort that certainly probably the that just medical being help aggregate. somewhat, through probably But seeing year. are come got unpredictable ramp the We little We go bit thought, see beginning – coming because first – for just bit year. programs I strong build new outsourcing year, start

You anything? add want to

Roop Lakkaraju

thanks, Yes, Jeff.

those growth so program ramp think thing comments, the yet. The through expect the your I answered new add start And see it half, it only is second ramps year would half, what in overall carrying you’ve I for on first QX specific there. is, we sequential with we’ll to and annually well

Anja Soderstrom

is then soft be going And of fourth rather medical? Okay. to the quarter terms in

Roop Lakkaraju


Anja Soderstrom

year? For this

Roop Lakkaraju

Correct. Yes.

Anja Soderstrom

And for how with that standing now additional Okay. Thank and you color. capacity ramping Mexico, are down? the where you thee terms in you of

Jeff Benck

levels, been we restrictions one productivity still where maybe the it’s pre-COVID, Mexico some, exception more what we materially regions we’re has we’ve Mexico back have with the the said out. some essentially ability are folks one high-risk still of site, some changing, It’s not challenging is have and one at our that the are, inefficiency deliver little a to the customer into the that there, customers it. office isn’t for on bit or not necessarily allowed But their commits come still forecasts classification. it’s we’re missing population of have because of percent so small the because speaker sites plant to do of into a risk

upticks else so bring, there more what but second anything kind it it the and fall And like watching I around it’s world. the exactly not it. quarter, and far the know we’re of we will staying in anywhere closely, been able we’ve seeing to a is bit than well, don’t to but say we’re world still in little it through disrupted close back everyone that, would So, because manage full was

Anja Soderstrom

And you. that of is impactful out Thank and how off fall you costs is additional that and COVID – or? to come actually for going

Jeff Benck

talked right. were few we quite ago. less Well, million of about, quarters that when million, a a kind $X.X embodied That was $X that it’s Roop than, bit in

on that’ll there. – level we may we’re paying has and million that or said that under that believe $X home Roop stay the include, like people be required it’ll folks whatever So, to protect

It caseload could if trying major the we’re now but amp our people without are a risk, that. it. driver But changed it’s and up because that of how not and shutting and change restrictions feels so, And certainly not like I all to things now way that’s thinking companies facilities figure about all and it that’s, right the of down guess through that’s that.

that that million it’s at level. thinking We’re $X

Roop Lakkaraju

to add QX, our flat that. in X.X% being relatively that And contemplates I’ll contemplates at range Anja, X% QX that. to The overall being maybe between also SG&A just QX margin

inclusive. So it’s of kind all

Anja Soderstrom

Thank Okay. in something them small is but about and China, see, is U.S. and footprint see in And bigger speaking elsewhere you people I Mexico you beneficial and of in out than China, Asia? then something footprint that have moving that a manufacturers in have the a you general you. are you to know

Jeff Benck

also Yes. in wanting people seen only the but that certainly not to increase closer to end demand regions source We is. have an where are domestically, in

Americas. everything of we So – you China, even it build some in for if and example, was to to back the used coming

Mexico going You as now to might an alternative. that see

So the in facilities to where low-cost our we've a in seen over way want incremental alternative people Mexico don't China. but maybe demand all be want region

Our some network. are have Thailand number great that customers and customers own But alternative or them. into ultimately that China we've Penang of our a Asia in want maybe we got a also to to plant, own within in selling market. moved stay they is If China

have And have still region, tariffs us so facility, the back. not said. building not the for we're that's region. because We and that why And to product they're one support just it's for you coming sense in the impacted makes by it's as

of there. we've huge production our like So is capacity it's got half that not exposure a

sector seem and pretty half to U.S. is products. defense which people domestically. and more And appropriate see moving approaching mix as be definitely stay does In the away we definitely manufacturing, people in the there to our we more – outsource our fact, well from medical looking that on are and see focus have we don't given U.S., as FDA

a And for trend good so that's us.

Anja Soderstrom

this... existing that maybe Or a So driver on see customers logos coming being for do you is more board? it with new see you

Jeff Benck

pipeline seen overall pipeline of opportunities. improved has improvement We've us. a XX% The in definitely for about

though differentiation? need me. build where development, to Benchmark not could environment, is the I rely like I'm as both a are is in my I'm deciding trend economic engineering do can we tough like or that might to do what that someone more people of people I and competitive own with and Benchmark product? general, Some really Maybe help as manufacturing. product test do Or engineering on good outsourcing but are at in need my why Maybe development, for

in high-value hasn't XX%. Plus participate the markets well. So the reached that of we trend is penetration serving outsourcing us really

that back may be lot manufacturing to supporting. there's the move from that U.S. when doing I to couple they for companies On in companies good it is come is our great. strategic put we're region. to pretty mix, that logos top that's products now together, of satisfaction, want a to are back think that, all of companies of that their pretty us, really whether companies yes, for our that that. decide and And to bigger and in of though, right well which a U.S. on. speaks and are be bodes a China also measures which And time we're piece doing to from there that we're that. repeat a customer business seeing trends some is add it that to in their want coming there's and seeing building an they – is that the really adder But own well demand But wouldn't I future the Asia So this And all still we're you it secular seeing. incremental new on potential the continue on

So that's encouraging.

Anja Soderstrom

light in end the a you. to being at next with I see hopefully years. for that what business just the XXXX you back can about And are at demand the bit muted little two maybe revenue we expect end Thank came your circle but to market of agree to as in customers. as would X%, it tunnel XXXX seeing sort and lastly, to then your maybe there? of sort I And a accelerate guidance relates of

Jeff Benck

environment think go I Well, didn't that is, to the model thinking over seems look, out to how want the through three we right, this what in pretty wanted we're environment. trying about did are we XXXX, think give But I far a we to all years, two to And do judge macro away. a years midterm little the next of business. we bit want what

that brought – down that all and share this things footprint we did down. while this bring year pay our furloughs, we wanted some also through structural quarter things the dramatically we of because SG&A give We did, to also to cuts

prospect won a say I at oil opportunity. coming we've back the commercial manageable like those We that is that and that for temporary gas. also and the business environment, Roop think headwinds we we in of of aerospace as will at line over industrial SG&A would you when on that wins revenue see we're of ramp existing in the based of actions, – some keep XXXX. on products don't But company, growth The some lot think macroeconomic the and the new two and years. So coming the kind next looking with about facing level restore we're the I are what we a –

that. bringing And we rate are down, enough overcoming momentum our that so we're actually have those but growth

customers improves, As be have upswing the business macro you're on environment see environment I the elective organically XX%, the that to through if really some the upside of lost inclined gas macro the return oil off would based to XX%, Even like a is lot not maybe. you then is because new customers get and and growth Aerospace on the we're of say we XX%, off XXXX, medical, XX%. growing we significant current any But up going a surgery in XX%. because counting to downturn.

back, booming half it's that as comments. I a line in So in XXXX, hopefully, helped it's – which comes outlook hopefully, XXXX, your late could second the demand that with of in certainly the and maybe be think sweetener all

Anja Soderstrom

was all much. very me. That you Thank Okay. for

Roop Lakkaraju

Anja. Thanks,

Jeff Benck

you. Thank


for conference remarks. concludes Weeks This would the closing any session. like question-and-answer to over I to turn back Lisa our

Lisa Weeks

XXth, will just of earnings our Investors On virtual support we December support the Day. November put next will I number XXth, Xth, Industrial's January supporting wanted On in in call before to conferences Conference. February. Conference, that Needham the Investor Technology James be we and reminder a NYSE Growth on Raymond Benchmark a will the

forward to day. up. we'll these you during events. meantime, hope have you, if Thank happy follow look reach further all will to the and questions, to We you please In with and us, be to out any great engaging feel you have a


now you for is presentation now conference The may attending Thank and you concluded. disconnect. today's