BHE Benchmark Electronics

Lisa Weeks Chief Strategy Officer & Head-Investor Relations
Jeff Benck Chief Executive Officer and President
Roop Lakkaraju Chief Financial Officer
Jaeson Schmidt Lake Street
James Ricchiuti Needham & Company
Anja Soderstrom Sidoti
Call transcript
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00:06 Good afternoon, everyone, and welcome to the Benchmark Electronics, Inc.

Third Quarter Twenty Twenty-One Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note this event is being recorded. I Lisa like Investor Weeks, time, conference turn Relations. this to over SVP, At would to now the XX:XX Strategy, and Ma’am, ahead. please go

Lisa Weeks

us quarter you, for Thank Jamie, thanks for XX:XX and Benchmark’s twenty-one twenty joining third earnings call. everyone today

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

will information. During discuss forward our call, we looking

Actual summary call, statements. that discuss third our update As conclude in described of no today's now, and progress our Jeff to market facts with Jeff and COVID-XX the undertakes summary, including the remarks ongoing For reminder, year, Q&A. may which Roop a twenty Benck. most obligation covering on begin and statements, any by of materially and before we constraint notably forward-looking a including program any pandemic. of SEC outlook differ X, the uncertainties, the as fourth a you press XX:XX will cash global quarter chain impact a for of by turn then sector are and an supply historical involve from our detailed filings. statements over not guidance. will update call balance results will Benchmark today's XX:XX from will I are and risks forward-looking Jeff wrap-up these turn statements initiatives sheet new CEO, quarter please our slide with the call second If the quarter results to wins. results twenty-one our to strategic XX:XX will releases

Jeff Benck

our chain amidst how delivered performed XX:XX proud Thank Lisa, and prices. call you growth. supply with really you, team everyone joining both this these afternoon. our unprecedented Despite challenges, and profit quarter revenue third the of thank I'm results we for this in strong

we five up announced was million today, line nine with dollars guidance earlier seventy-two of our percent revenue and in year-over-year. was As

operating industrials, demand represents in Third revenue and Non-GAAP growth three-point Semi-Cap, continued program by eight in performance was in to margins. sequential operating quarter gross revenue XX:XX improving to computing. three strength a improved recovering high improved to four Non-GAAP in margins percent with Now on improving nine-point thirty and margins turning percent ongoing percent which ramps improvement driven profits,

in guidance midpoint environment. seventy quarter, reminder, last and of seventy-one share margins cycle supply Earnings in point by the a than due above dollars were which operating quarter nine driven As zero the was the stock Non-GAAP three our inventory days. were higher in of XX:XX per third approximately increase basis our expenses, quarter. Albeit cash compensation results the includes – to conversion points an

quarter, In chain of backdrop estimated into demand were the ongoing As to made fulfil mentioned and we significantly million difficult This previously, a aligned demand achieved component XX:XX the quarter the QX delivery of in half with twenty-two. our supply more from that of it to customer unable that these dollars is first to one and meet hundred twenty challenges requested results being were we third customers. over availability demand all in expectations.

a the new year. Late in component continued demand balance timing will operations and demand volatile unfulfilled our also inefficiencies also parish decommits delivery creating quarter the are we fair likely as availability While twenty some we against amount their demand expect of plans this and team allocations. component XX:XX supplier with to OEMs that into appreciate to manage replanning for schedules roll twenty-two, challenges delivery

all for based are XX:XX continue to On on said locations. pleased that, is Having front, government we intermittent the comply around that to need especially we experience the disruptions our vaccine with global COVID the availability health persevere operations protect have and to our improving our policies own our world, did international of improve to of proud I'm and support and the to how safety slide in XX:XX position worked Please our four. to tirelessly Despite requirements challenges teams our turn employees. customers. our

sequential year-over-year to bookings. strong revenue growth, great and In another addition, quarter we had of

class customers world the have And engineering our We both complex at to are the around quality see skills our more our world. of our experience opportunity and excited manufacturing design operations high capabilities. to more

well, XX:XX are team new manufacturing programs awarded continues medical, new had program a for In systems. to and perform some monitoring surgery wins we and meaningful Our robotic glucose we go-to-market in device QX.

product and funnel to In a manufacturing for XX:XX build that systems. generation for on and new our as probably electronics. advanced design announced to is the In and multiple do very next awarded products. design the manufacturing, the opportunity. of modules imaging test light partner and Leading space new complex advanced our engineering AI’s hopefully all capabilities and tenant you On Semi-Cap medical key we which core combat and strong the near a front, partner the more great program optical on a I over remains engineering manufacturing And card, are for well from sensors will outlook our it's In wafer sector, benchmark with manufacturing sensor. current continuing programs continue financial you. a A&D machining, microelectronics well selected our electronics were strategy and had as as competencies system new well. for of and be we instrumentation Roop leverage operations QX, the business QX to and adaptive had to services were the a wafer our to commercial engineering second we new XX:XX as with well awarded as inspection we manufacturing that sectors, manufacturing we AI, medical term a manufacturing with Industrials, in an results, We'll design In of manufacturing our in we engineering manufacturing. quarter that precision were with for Now, related for and as light optics working turn tool. and been strong we guidance products, lidar In system where AI finally, awarded business or robust for for including and satellite a for telco for awarded was awarded our test XX:XX build our to wins XX:XX portfolio. over new a we XX:XX antennas along This related mobile straight printers design customer handling new to on details as programs work give lines, third Semi-Cap, programs we quarter team. market, free QX. programs competing optical Overall, call go application. our services Roop,

Roop Lakkaraju

cardio to dollars Please and our Total for good was sector. eight respiratory million five percent five you, and Thank by were markets. afternoon. benchmark higher up percent Medical for the XX:XX revenues nine six sequentially QX, which improving higher year-over-year. higher market quarter Jeff, slightly turn is slide third and sequentially in revenue from than revenue the expected seventy-two demand and in percent care

due levels precision half related several new into end Semi-Cap stronger to over which equipment. programs five to revenues for revenues our and As and shipped Defense down remain four revenues and improving processing brown-based A&D vendors. percent up increased slightly relates for are fab in percent twenty-one XX:XX large in demand several year-over-year third planned, external medical our from programs. when front the twenty capacity quarter will QX levels is products secure to demand half electro-mechanical sequentially customer and second wafer future high, the at our increasing backlog were services, This sector third Demand issues primarily be and complete thirty are improving for first communications quarter facilities. assembly our XX:XX machining from demand

revenues up eight a and well our oil gas, applications. demand six new While for were yet strong, the because programs, our Industrial from as remains infrastructure transportation quarter year-over-year four twenty continued to percent A&D sequentially commercial Defense as programs provide sector improvements were percent revenues third percent aerospace programs, of building from and commercial ramp year-over-year levels. pre-pandemic recover to down our have program and

up from primarily twenty-one by year-over-year value industrials in component year. sequentially our one levels. up that Overall, computing higher expect represented traditional markets from first ramp program forty of delays sector, In revenue sequentially was We XX:XX into and revenue. half the high-performance planned over the percent to percent our next will In programs continue were computing three revenues percent be the down twenty new ramps markets, telco shortages. eighty the third quarter ten

nineteen to the fifty represented percent of of slide revenues, quarter. turn percent Our markets represented XX:XX seven. quarter in traditional customers Please top third ten sales third our

two share GAAP was zero per Our point earnings for quarter the three dollars.

various costs continued utilization restructuring across activities of percent were by our twenty basis quarter six totalling third our points four and and included On gross our our points restructuring sixty of higher somewhat aligned improved dollars this future revenue is our driven basis, global one-time basis better midpoint Our to throughout Non-GAAP the sequential improvements to better by because XX:XX nine-point GAAP global business productivity offset results point up chain and productivity supply mix a than was facilities. network related guidance margin inefficiencies. we other QX, For focus. four million a

percent, sequential hundred prior Please million improvement Non-GAAP three was margin was seven seven-point cycle conversion flat point because Jurisdictions. sequentially of dollars for performance. thirty the quarter. to eight point operating higher percent of midpoint in from Our was Non-GAAP two turn U. effective our which ROIC was sequentially dollars XX:XX EPS XX:XX zero SG&A rate And and was eight than flat slide nine zero year-over-year. sets Foreign the Our cash mix point three Non-GAAP was Non-GAAP percent review a zero twenty our improvement. the the two point of profits S. twenty-one-point tax dollars three-point one basis twenty-one to the and four guidance QX quarter, between QX which is

for the Our support XX:XX an while growth update days quarter. navigating in cash increase nine to were cycle Resources. days higher market. chain to seventy-one and QX inventory constrained due as liquidity the was The conversion to turn compared Capital on investing third primarily in of cycle in to levels Please slide supply

was hundred cash dollars ninety-one September dollars Our million with at available in thirty. the S. balance two one million six and U.

million Our flow million cash fifty-five inventory our cash use previously We higher The free the balances in used primarily million cash in cash in flow operations of dollars decrease after and is results seventy-nine we in dollars decreased forty-two capital discussed. levels sequentially. QX as of dollars was expenditures.

of to September and to In cash we on nine our and million dollars debt allocation dividends have and nine had dollars used slide positive five our dollars on thirty-one capital and activity. we a Turning point hundred review nine As hundred outstanding outstanding one paid shares. ten currently of repurchased million hundred point borrowings million XX:XX dollars. thousand is loan revolver. our net million seventy-two and to cash thirtieth, three We sixty of one term available no our QX,

we Slide As to Please hundred of XX:XX September remaining, approximately of million guidance. and dollars authorization. our sixty-four eleven quarter had existing one our twenty repurchase for twenty-one review a turn share and thirtieth, fourth

the sixty twelve six a to We ten year-over-year percent expect at dollars midpoint which improvement. from revenue dollars range million five million represents to

million expect margins will our two dollars and percent to will QX and be percent gross that range We dollars. nine-point SG&A thirty-five for between four nine-point million thirty-three

three-point estimated four for purposes. point full still and to range impact amortization guidance XX:XX Implied year modelling the costs. nine dollars provided targeting margins are Non-GAAP to at guidance percent. margin and the assets operating percent is our of a gross The in does billion restructuring other exclude be three of for We intangible

are part charges Our in guidance approximately rationale QX four million into in five incur approximately to dollars wanted the point dollars annualized restructuring three other forecasted QX million dollars. four locations. transition for seven We on expected five to disclosure manufacturing of California, per of expect be earnings more the we million restructuring this will between expect decision. you more to is in point included per of in related dollars the the million a non-recurring color point QX of to programs share QX. the savings is that XX:XX be in dollars restructuring site to and Jeff point dollars. and are future EMS provided zero Part with diluted associated give for decision discontinue the two zero to million to Once locations costs the completed, advise year. previous and Non-GAAP benchmark three or other But point this dollars closure is range one strategic I midpoint four dollars expected to five of four we zero four

forty generate cash to forty-five from We million fifty-five twenty for spending be our range expect million growth through sixty twenty QX customers year dollars fiscal twenty-one. million to dollars of fiscal approximately our will dollars and higher year CapEx operations This for support estimate for contemplates twenty-one twenty-two. inventory flow between year and twenty We we to into that the

be are point to primarily to business flow expected We math committed cash Other outstanding model. debt. to is four is two related expenses which our of and our million expense positive XX:XX as dollars generation interest operating part free

effective We QX income shares million distribution network. our that expected tax percent one thirty-five point will approximately of expect around average for The global and Non-GAAP weighted seven for twenty dollars. our between of because be nineteen the are percent QX rate

XX:XX perspective aware, I over market end earlier. As components stated comment be strong wanted I continues demand the Before back to you're turn Jeff, our supply. on Jeff as call on to to

and our However, our chain upside interruptions of consideration the outs actions in ability to customers. that, we committed significant but our twenty-one quarter these produce The are constraining categories will continued customers. across assumes an single the component push no known turn that changes grow high demand forecast takes supply across constraints digits. in our from most We orders general, temporarily constraints end suppliers. with were we allocation previously sourcing. supply commodity to revenue also back us to increased QX To changes working are replay operations do all in ability and is market conditions In to component investment assumes full demand. have receiving enable due Jeff. ultimate XX:XX guidance some we tighter and for future to to inventory to customers redesign demand access to or constraints, in the component materials raw our are counteract our no will to customer the and components In component fill XX:XX give twenty I'll to believe volatility, significant further base into all our challenging secure we in confidence Gains aligned and mix actively over increase COVID. summary, operations you material due with And it XX:XX products

Jeff Benck

XX:XX for update, Thanks that Roop.

color thirteen. demand by provide industry. our on shown guidance, on slide That's on quarter to view Roop’s I vertical additional some comments our want Following third of

expect fourth strength wafer from With the and the sequential from processing, computing sectors. quarter, capital front-end signals ongoing and year-over-year revenue space. we demand For equipment Semi-Cap fab growth customers our the and in

revising are percent forecast to sector percent growth our We semi thirty now over revenues. forty twenty from twenty

driven quarter If year revised rate ten recall entered It demand. amazing hard strategy growth work this have the a outlook, increase investment to XX:XX demand our for this and year, upward equipment. in we taken strong percent by as annual we capital and every support focused by semiconductor you a in team expecting has will continued

number production next as in we we to programs year year cycle, In had We by capacity super OEMs. computing, growth continued earlier due expect growth further new global computing next in in are performance output expect to investing a our Semi-Cap this at year. additional expand high fueled QX continue and in the projected we of to

oil gas high-performance twenty we continued to expectation increasing second in throughout see targeted from demand of have for win pleased our twenty-one twenty-two. subsector, revenues XX:XX twenty and industrials, continued strength are We complex our projects and supports and to And new in building the which this customers. approximately half the this demand infrastructure growth new market, number full with we With year percent the sector ten of a expect we second strong in telco and from expect now of portfolio the twenty twenty-one. strength half XX:XX a products. rents, program for In improving computing broadband infrastructure across

shortages on continue commercial to quarterly A&D is signs of are strong, component supply albeit demand into fluctuations certifications Our in any aerospace we However, see to for XX:XX recovery. strength expect yet near-term next chain. upside prohibiting remain some In Defense revenue in the year Defense and based this product programs QX sector. with portfolio and While demand

commercial the lagging multi-aisle in aircraft, demand we use are aerospace international long are which a primarily recovery. subsector, For haul which flights, you position for on

strength A&D weakness. aerospace such, remained QX, in grew QX. flat revenues for we Sector twenty As we sequentially expect are Defense all medical does flat revenues offset twenty-one expecting XX:XX in as but sector In not

into demand our aligned bookings have and capabilities business, improvement open expected sector our twenty revenue medical qualifications manufacturing revenue we impacting improving technical our to as tackle with orders to model. rich a we growth seen be the pacing growth slide focus of to previously If note, customer at twenty-two. on in revenue turn and the our achieve availability our twenty-one, our growth sector growth for all that had top base as XX:XX a demand pleased setting fourteen to for strong problems. few I'm wanted objectives of up in year. mid-term strong Growing you completion complex quarter year. our On new priority benchmark, this I and will ahead to to is expected as ability begins set twenty highlights program final positive While were twenty component strong well we fulfil are ability strategic the of twenty-one provide that a a Revenue our is remains in XX:XX targeted head

in XX:XX great programs to New next year. and demand headed medical, continuing with for the invest continued Semi-Cap, give industrial talent expansion in sustainable momentum us into and the are future. along We infrastructure our computing a

initiatives and aligned sustainability well the spring, in project report published we our to initiatives into on we Building year our sustainability and sheet financial the corporate report will reporting development We increasing next transparency Nations proxy. XX:XX our And momentum fact objective deliver are climate and taskforce customers. disclosures. our frameworks of related have with United our sustainable to as the goals. on global the SASB align our with ESG, such plan and last other for All investors sustainability the

our inclusion is also to inclusion will DE&I members within amount are and from of our council in and different I'm integrate team strategy we for roadmap. role believe comprised global our and we employee critical organization. this of council. really diversity inform charter DE&I be to advancing aligned equity tremendous shape at to to company's The levels departments program. I success launched discuss support provide are We employee this efforts team of the And about XX:XX voices our excited continuous improvement and multi-year Recently, have the of the that to regions this advice received benchmark. the the

forty commitment In expenses. to earnings and our earnings. enabled were we growing by on our These results over control continued our focused growth percent we're trajectory revenue sequentially. the Lastly, grew QX,

greater percent over utilization gross year the non full than operations, including twenty planning XX:XX beyond. twenty-two expect the and As earnings network sites. thirty process global We of of twenty-one For twenty. twenty twenty our future and the part and nine of current our of growth margin strategic analyzed for we percent

needs current twenty to a customers process, date and we outcome our with XX:XX volume this is scale, ranger we manufacturing. of costs, Moorpark of the close operations, As the increased twenty-two. earlier, by consider factors closure part many for California placement, that long including end decided mentioned of future Roop and this As geographic target have EMS

action, As and our employees two we footprint three reducing by of our California hundred will by be a global this workforce result reducing approximately in percent.

to high improve support manufacturing efficiency. locations our the thank customer the from in process. employees easy. teams impact margins on on the improving never In XX:XX the network, based will to industrials, for strong location XX:XX asset to percent. our and the These transfer in will past revenue percent twenty expect in and Moorpark computing, demand during earnings twenty-one which site customers high-performance We at With over year. are in And year-over-year summary, for that our future utilization growth nine anticipating demand with we the are and other lower decisions we thirty our digits in mix, their growth benchmark. single I revenue their of fifteen slide to this Semi-Cap support and overall for programs our ongoing transition want gross growth turn in continued in

these outlook twenty expect Roop progress earnings inventory twenty revising As cash that, to call my twenty-two XX:XX call expected full to results and the forward flow hard on to are earlier, to with downward our support want to our and excited express about in conduct in Q&A. I'm twenty-one but giving flow our twenty February. for cash teams closing, In are we operating appreciation our our based very suppliers new investments, update I'll operating I I twenty-one our again to views the our positive year. on year. our the who and customers. deep operator over turn on look an And still for thus discussed tirelessly working far XX:XX we you our the in for work


we today XX:XX the Instructions] question-and-answer Ladies ahead from comes Street. time, with Schmidt your from Lake question Jaeson question. begin and gentlemen, will first at Please Our session. go [Operator this

Jaeson Schmidt

sound but questions. curious supply pretty be like value seeing really specifically seem my other of broad-based, where out the markets? QX, you just and are you're of sort medical, the higher sort there the mean, obviously, be of want but easing rank I you're known you in in out taking you to guys. start it well just Semi-Cap kind constraints, will the with order, called most Hey, XX:XX could what seeing if headwinds? Thanks does for constraints to I

Roop Lakkaraju

to to you. Jason talk Hey, good

and, add. areas the start, I'll So, across to commodity again, sectors really seeing we this supply all and comments constraints the but degree call are some of because constraint chain. some I it did from across Really on all a medical, cutting the have constraints Jeff we're

And so, of part demand that's have also inventory we've market in an standpoint. reason the the support seeing we're help to invested end from we that

As forward, address that and investment will we move we're I allow demand to as seeing us the think we move forwarded.

of Let little but when factor some too, me lot the out of argue bit in and other do through component the of Semi-Cap. we're things. in COVID of criticality, that we we components way a working lot of because cleaning could really of and third that to machining you just type and quarter metal on do believe related, different our a have necessarily chain which precision XX:XX there the not had as those add work, More business. bit of supply you there. Jaeson, the process coatings is many COVID outside of supplier do with for necessarily think part Obviously, little broader that issues quarter not We a a we

about that's way and up medical Even Jaeson, So from seeing out it didn't maybe you probably things to medical, were keeping more we it only upside other it's constraints us what to know that's think it, for in you. XX:XX though see referring sequential I probably if point really the specific to And growth. because that's year-over-year. were, the we Semi-Cap specific

Jaeson Schmidt

last? comments actually seeing and expectation you really No, how some long Okay. And decommits on some is helpful. then to XX:XX just have just are given to these seeing just constraints clarify decommits, that's are your lasted your expected Or today? that

Roop Lakkaraju

revenue XX:XX especially really us It’s them when and our they Yes, demand question. that or affecting us. we've decommits build got that's great the component where the defers this affects And It's bills expected and it again, a and out, pushes out, scheduled right, replanning opportunity. delayed, pushing of

still we it try work replan it of we then and to to customers with or allocation those it versus near-term get see getting building can So, we our more long-term? if components and finish

Jeff Benck

extending because currently order say, you it's need. for to One that the and components we customers on just demand suppliers are up product was a get two longer have going here. I'm lead just long on dynamics upside had time, harder it's lined to have for XX:XX if taken But lead that deliver times There's not to right is able was. to where I dynamic it get going when you seen been it time, and be quarter within thought within

we've there to So, containerships the with all out anyone beach of [Indiscernible] long flying seen out trying hanging unload.

lot So, to been the there's a but well, the we've certainly can and – been a see from pretty environment. you that of manage results risk in supply as chain it's managed through able crazy

Jaeson Schmidt

visibility mean, way extend half continue, into calendar that's of how for for it next you Semi-Cap XX:XX the twenty-two? your really does nice a far spot these based the year it and to programs? through Okay. sounds of guys commentary, And first last mean has one this I for is me and it I'll bright I queue. extend sort jump back on been does expected like some year, all into

Jeff Benck

want months our visibility. XX:XX with bit five little is say this would of order. different four they Yes, product on quarters six horizon we to environment, kind given for percent customers normally a we're current components on us What's just to get visibility we're order give sending to asking

our that really little looks lot what's on backlog only weighing So, is we the strong, I like solid twenty-two, but twenty-two. have, say the in twenty confidence forecast would a of through not is which through visibility better pretty a it's

Jaeson Schmidt

a makes lot guys. that sense. Thanks Okay, XX:XX

Jeff Benck

for Thanks good questions. XX:XX


go ahead & XX:XX Please Needham Ricchiuti Our comes next Company. question your from from James question. with

James Ricchiuti

guys Good you you. the I Thank to I dollars order late, joined and afternoon. talk the fulfil hundred unable of this challenges? Hi. hear of just did bit on the but demand clarify, may I quarter would is have million say XX:XX heard, on roughly component like because were one a about little what you to I of that

Jeff Benck

Jim. of right, the That's number years. XX:XX That's

James Ricchiuti

I little to was I which of far. just sense pronounced want in? the a little profitability XX:XX can business know Okay. number. it a That's it's to a verticals you if more to the, talk That's better and perhaps, bit big don't as get that

Jeff Benck

XX:XX that's network and that other cut million it's least one say Jim the kind necessarily Jeff all probably across in other out and particular is Yeah, I Semi-Cap some sites the than would hundred well. of sectors degree really our vertical comments dollars to across so more or just of mentioned, one pronounced the the affected was some as pushing or of

consistent fairly that from standpoint. it's So,

James Ricchiuti

of on in actual then way this? quantify And Is business perishable think that? that your maybe XX:XX terms you to

Jeff Benck

XX:XX we that And a last customers still was to big they that hard that's want We push pretty from had the product. hear similar. not Well, from pinpoint. quarter

could sort right and of is to demand continue forward, So, you fulfil grow. we rolling this as argue

and have look, stay way. you're the that unrealistic they end And would going being to it upside to right? show hard that see do they this really characterize at that be twenty-two. in what with it's everything demand, supply that okay, fulfil to have we in rolling either are. QX. dollars keep being and continue saying year some one We that, demand can roll definitively benchmark able thinking to strong terms close we're what have to of to they OEMs will probably a amount million we're now to on their hundred in is said, of through into pragmatic reset am look up what That right going pressure will large I bit Now can't quarter, we'll some they'll just a know believe expectations on. That the rollover. the boundary, We We're we

the there's at year targets. to their we set think going some we're think better to their and new than what that think fiscal are for about operating have going they're and adjustment plan to going a look there. go I I through And sense own people see

James Ricchiuti

some being I Got XX:XX which apart certainly extent terms what hearing extent I'm just which folks are U. in in seeing with component you're Operations. to yet, in it. and all certainly impacting we've S. are on from by significant, And pressure as is, challenges, the labor mean impacted you not costs costs elsewhere, well. rising of about what it's wondering

Roop Lakkaraju

there. side, definitely to a XX:XX a the the things are internationally, Yes. the extent in effectively it's on our a definitely job I on mean, standpoint. various seeing look of certain wage of we that employees which right, S. from in to pressures and and pressure very There's And supporting jurisdictions even pass much teams good material we labor but cost U. And doing customers we that. pricing are to managing were through our

Jeff Benck

got to and sure some we XX:XX the make competitive, competitive. benefits got adjustments came on medical bowling starting in certain to had have benefits. domains on like depending make we salary Things match Yeah, package to we stay

something it's and So, kind got on we But the of definitely, environment on we're of just as going makes it resource know also employees. our grow, look at to things. to package a we more and some into is for cost But the on putting attention care for quite we paying of how and employees the talent it's pressure this sense bit we're and all resource there's that. side beyond we war is it make the piece pressure whole important. to on We and sure there's a monetary is our need right add

a also know, we to there's model lot Roop our grow of revenues. we as As leverage as well continue in described,

these a increasing – margin So by costs fully other increasing that's the to helping be it's cost. impacted on bit not

James Ricchiuti

which was have half, that program, said XX:XX and to I up of scale how think Okay. don't and skewed that is but you've I missed the to second QX about that you into the more have anticipated? where know talked in much and high computing ramp scaling is may I this, up past performance

Jeff Benck

it Yes, is. XX:XX

up were QX. in forty over sequentially percent we fact, In

we've wins and happened what's customer filled had we because happened is continuing that it's actually definitely other that from additional large some and with in with programs in also there. it other So, segment the customers

nicely pretty of particularly other that half So, are twenty-two going see But at some strong of a the it's in to compute off on twenty-two of we're we've saying, because back going the to in again, QX. in programs. year-over-year we had hold looking also quarter in fill twenty

of bit So, we've larger went program. activity of in quite success. there momentum kind had good one it There's and from a

James Ricchiuti

it Thank you. XX:XX Got


comes ahead your next Soderstrom question. from Please Anja go Instructions] [Operator Sidoti. XX:XX from with our And question

Anja Soderstrom

XX:XX Hi Lisa. taking Jeff, Roop, Thanks my questions. and for

a already, the quarter seeing see did do up what is of some as follow-up the follow-up supply that during going have fourth lot works soon the in the progress? quarter? fourth you how I constraints, as into you on questions that but some So, on the I corner Over have and what see as quarter,

Jeff Benck

The think the but to the constraints think the worse. that And that Yes, comment quarter, those into a third worse. going or in quarter. question. I We bit, I are got XX:XX continue we've on constraints fourth [Indiscernible] think your just little

think it. market the into twenty-two. we we And look to twenty-two, as throughout about continue is we As really really think going constraint

look say. more third to we guidance teams gotten the we've extraordinary thought challenging, factored quite in at we quarter the the is That's to It's would but able our it's XX:XX quarter. what we that be got So, into the fourth going our as were quarter. fourth think all reason accomplish. I worse And about

Roop Lakkaraju

I said a Yes, to half, Intel’s We're probably less with impactful as but We sort little to think at hopefully being we comments saw back twenty-two start next of ease. you're probably year, XX:XX get this subtle now we looking the the chain. mid that for about at constrained. things all twenty-two maybe all of dealing is

part a we're unfortunately, So, that. of

So, of we effects build the that.

it's but it's continuing. thinking the are we environment, some QX So, tougher are Hopefully, we all QX of know twenty-two. constrained

Anja Soderstrom

of constraints the with is terms being is now issue component part the in supply them? much how So How all of versus it chain much like of delay? XX:XX ships out

Roop Lakkaraju

of are because maybe capacity; component they're full the have components the as XX:XX much It's the government having that doesn't allocated and to more they're allocating suppliers get allocate SASB it first – it's don't doesn't pushing more the get maybe more medical because stuff. automotive of and

there's think are really but foundation, thing. goes frankly with I in just the starts this sheet semiconductors. I the things trucking coming anymore. But so. on that, to not the enough or – like We're we're problem, really late the capacity shipments issues it it no across and increased have of that certainly port the limited exacerbating [Indiscernible] and some think issues are range is predominant It's is question memory components. even or seeing And not restrictions seeing just passive metal plastics that

Anja Soderstrom

labor the availability XX:XX So of I how Difficulty] the do or want see inflation, ask but the vaccination the you labor of to rollout, in layer about is it improving [Technical

Roop Lakkaraju

it’s a help XX:XX a specific just but it's own need some to got our and that about set the up skill say I that we've bit talent something specific implications get have. we for team weeks noise with skill go. to in how And a wouldn’t through still agency a or cases, a bit There week, we to improving and improving. us it's about it’s going issue We're the complex vaccine I I is those find working to could mandates and coming have but we're learn the as when think wouldn’t help in the that, there's recruit lot of that here, a concern in we us. where say sets it more system

Anja Soderstrom

XX:XX Okay. Thank you.

actually have I a think good was all that for questions. me

Roop Lakkaraju

XX:XX Thanks. Okay.


for floor remarks. turn Lisa gentlemen, with session. to over the to any XX:XX today's end question-and-answer that, we'll I'd closing weeks And ladies back and like

Lisa Weeks

for XX:XX Thank you joining today. call our again

great our NYSE Conference twenty to our you forward the in release Access Thank be supporting happy have and you out virtual Benchmark Needham to earnings a to be as and you also the November call well engaging you today, I'll earnings please at sixteenth events all as we regarding January follow-up. twenty-two. Day Group February. put a industrials follow-up these If And hope wanted reach eleven I that will questions have on with afternoon. on any to look don't hesitate reminder and


today's we for We do gentlemen, with will and thank XX:XX conclude attending. you Again, call. conference that ladies

lines. You now your disconnect may