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AEIS Advanced Energy Industries

Participants
Edwin Mok VP, Strategic Marketing & IR
Steve Kelley President & CEO
Paul Oldham EVP & CFO
Brian Smith Director, IR
Quinn Bolton Needham & Company
Krish Sankar Cowen & Co
Mehdi Hosseini SFG
Amanda Scarnati Citi
Scott Graham Rosenblatt Securities
Pavel Molchanov Raymond James
Paretosh Misra Berenberg
Weston Twigg KeyBanc Capital Markets
Call transcript
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Operator

Good day and thank you for standing by. Welcome to the Advanced Energy Industries First Quarter 2021 Conference Call. At this time, all participants' are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. to Mok, conference Marketing Vice Relations. like speaker, to and now Edwin today, President would hand over the your Investor I of Strategic go Please ahead.

Edwin Mok

quarter Welcome Thank our are today Director Brian Vice our Paul Relations. Advanced morning President Operator. CEO; Kelley, conference everyone. of and our you, Energy's With Investor Good Steve first Smith, Oldham, XXXX President me and earnings call. and to Executive CFO;

website can have ir.advanced-energy.com. not earnings find seen also it a There at you find our you you If presentation. press on our slide release, QX

begin, Before Advanced investor presenting would conferences I will several I that like to at months. Energy mention in coming the be

we will occur, announcement. that events As make

interpreted GAAP and and estimates the obligation could and are these on that, can President gains transition results risks Let today, costs, be specified. a and not On should our our guidance. exchange With call future Kelley. A measures losses, today's that contains today reconciliation and non-GAAP in foreign Steve me non-GAAP our or between May found items. concerning statements subject statements CEO, to unrealized pass press not in are targets performance. restructuring be financial me from you long-term to Excluded Long-term goals Information let uncertainties aspirational vision financial basis, release. call, forward-looking today's call that detailed differ is materially stock based amortization, include will XXXX, integration actual compensation, company guarantees today's on cause All presented forward-looking otherwise presented be results as non-GAAP our unless results, are SEC uncertainties of and goals as to of our remind that update them. and the and are risks management's assumes filings. X, to no and

Steve Kelley

good and for joining Edwin, Thanks morning, call today. everyone. you, the Thank

win systems. We our in we industry-leading We short-term, chain, continue in sales our all delivery In be order entered of the in These Demand of and record across upside First tactical $XXX quarter with target the where leadership from certain our position was to semiconductor new customers quarter pressing challenge as our design second way, are process markets benefiting a forecasted. into quarter market, record with as dealing revenue backlog. the constraints to integrated had increasing particularly power million. limited continues in supply we is impressive the products adopt constraints the an products. shortages most first circuits. our we

also quarter second these Our guidance incorporates impact the constraints. of

we proprietary half of second that satisfy begin the took nearly products, nature shift will the which the demand we the of all supply expect most that in second have will of believe the that our quarter quarter. in third the in of However, into to given the first quarter actions to in Also, the chain impact points the short address year. positive a to continue we

throughput, continuously customers technology to in and consumption. lower was delivery like quarter, in for the driven position by additional our year-on-year yields, we key power and process growth by deposition leadership reduce market This maintained sequentially. working Advanced growing and I'd In technology and of markets. systems, power and X% closely customers enable our revenues XX% target demand We've enabling our Now record products costs, our generated provide for processes. process our by market, with each the a to Advanced strong higher for semiconductor Edge improve power innovating. first color increase Energy's

have products we past of a market. the the series Over into year, launched next-generation

years. for RPS being OEMs Our provide Advanced next-generation differentiated that major are share our coming system and with and both first market etch these at In latest process quarter, high products designs platforms. system RF and currently highly power ALD are we the won believe customers. the multiple generators unique [ph] eVos by gains MAXstream evaluated our We Energy all in our

wins traditional strength. our in In addition process area to power, of

be We expect also and year bullish secured will we the record market given next-generation sales for beyond products. of wins for into we're semiconductor Artesyn strong branded a products. and To embedded XXXX differentiated line-up about power that XXXX our summarize,

applications flat improve medical Now medical, carbon strength the industrial battery our moving horticulture. quarter. during In we manufacturing, life to XX% industrial applications, and production, demand revenue diagnostic markets, was and saw fiber up where year-on-year. and In begin display, science to in for panel

well improving and forward, a of expect confirmed to first new increased markets Looking course our been In that year manufacturing conditions, into multiple applications. acceptance applications. Ascent strengthen as MS as of we industrial our designed platform range cell the the quarter, solar economic to medical the products has the due into we through of wide

In panel controller application. addition, our been power has Thyro-A+ into a incorporated flat manufacturing

specific computing were in expected, Moving inventory by revenues quarter to the down due hyperscale market, ongoing customers. center data digestion the primarily to first as

quarter increased second by in Looking the demand the half the followed uptick see we strong in forward, in demand of second a year.

to won We and volt hyperscale new board-mounted product have another continue expect progress in customers XX Tier-X volt XX server opportunities. DC-to-DC in to design later on and make first to this additional quarter focus qualifications the good continue year. We

shift down first year-on-year. telecom I'll was to where quarter to flat sequentially revenue and the Now roughly market, network

actions we Our revenue portfolio of late executed impact XXXX. in quarter the first reflected full

American members those and our of a I'd largest have employee visited our share and to Advanced the at team. and grow initial development joining telecom channel In differentiate. revenue observations. My takeaways North some March, of my we Advanced first personal of quarter two critical can sites meetings have I first, customers forward, like two had at focused design by closing, XG partners. a to first infrastructure class we XG a to In engineers culture many foster meet I've from on who XX also with in excellence. and We're scientists the and are targeting expect Energy Since leading technical opportunity we the face-to-face higher excellent end some applications manufacturing days, in engagement. we the of OEM. on Moving general spoken second, most of And where Energy high-level

Our reliability customers deliver for well, service our in and cycles. during a technologies, our teams grow development value company proposition. with business, products timely since closely we'll need customer fashion They products new have technical product our and Energy's appreciation on together improving To a Advanced best-in-class the know to and work genuine continuously levels. focus quality, technologies We industry-leading services.

the supplier We both consolidation have targeting of Advanced highly to Energy part right is be benefit will it think where power The strong deploy sense and I'm and We're the our we will sheet In and that conclusion, industry Advanced Energy makes team. a financial and capital for markets. company. supply customers. balance the strategic delighted fragmented,

or a provide on growth and products, and meet strong our track of to a detailed will and have accelerating longer-term our targets. lineup we review aspirational great and have earnings focused guidance. goals are We financial financial culture. results differentiated We're and revenue exceed on now Paul,

Paul Oldham

the Thank record our demand up first and We constraints profitability financial the significantly our delivered several be was you, morning industry-wide customer of Overall, backlog everyone. the and good requirements $XXX flow limited the and We the Steve, resulting very above in customer to year-over-year factor to over in solid quarter in cash revenue, results customer strong; in over midpoint revenue and commitment guidance. of with will well quarter near-term. executed increased quarters. upside meet pacing visibility million next supply outlook giving the us but in

our continue full-suite customer our and of semi mentioned, by solid capital Overall R&D driven share Return approach invested profitability fuel gains to solutions. XX%, and working above semiconductor of than revenues for efficiency. gross investments long-term capital XX% partially on both offset Steve margins by to on As demand greater set earnings grew continues another as be XX% target future increased record to power growth. year-over-year,

to X% million, quarter million, very million, quarter and year-ago, XX% declined demand. our Center XX% constraints. our year-over-year, sequentially, nearly sales was team the as markets had to a and $XXX was First year, supply as down able due grew X% but from strong Semiconductor XX% mostly quarter, up year-ago XX% strengthening Data anticipated. down a over up Computing was last to revenue $XX $XXX last sequentially. Revenue industrial were X% $XX revenue operations to million, respond from we from sequentially XX% from customer up and but medical

the and customers just However, reflecting to new due several recover, up demand from realized a XX% the in placing quarter; in added for flat Telecom was XXX and basis late partially down baseline higher million last our costs. we essentially a the applications. a product quarters points to value QX, revenue on with on Gross higher mix, going year-ago sequentially, networking lower sales two portfolios and return with forward was after quarter, primarily streamline signaling were orders digestion. demand chain Non-GAAP quarter and margins as products our improved started points from supply volume growth $XX higher basis XX.X%, in XX year gross of margin synergies. to for offset by some focused

SG&A opportunities. on last XX.X%, to logistics million we was multiple the as improvements last expenses chain sales. the up in a margin for expect costs year, XXX fund from as of Operating percentage investments were reflecting We basis growth headwind margins $X.X and points and margin, million, new quarter in supply be higher gross in quarter continue up near-term. from the a $XX.X gross to operating R&D to Non-GAAP

in expect While losses position. other $X.X of half $X.X on million growth million to we increase in of should OpEx million, accelerates. the expand second FX as expense operating and was going revenue forward, margins $X.X Non-GAAP including expense interest modestly settlements year-end

going be We $X other to range million $X.X the to forward. expect in expenses million

non-GAAP or item. was primarily tax unfavorable discrete million XX.X% expense $X.X Our

and GAAP last Non-GAAP the Looking earnings revenue. due XX% non-GAAP expect for from range. down forward, year-ago, were up to but rates we share, XX% lower in $X.XX from $X.XX tax a the quarter to the quarter remain

capital by million of XX sheet. and now our with should quarter the cash million, expenditures from largely Inventories as were ended one operations increased offsetting was Capital networking we critical from level associated increased marketable the supply payable Receivables million quarter was were last payables and turns at Total first the securities X.X to continuing components. We days XX million times. $XXX the XX day Turning $X.X for of Accounts expectation cash from $XXX increased slightly $X.X higher QX. balance volume quarter. to rose was up for depreciation $XX.X days, up of DPO million, and flow were pursue grow and of of and DSO Inventory level days. million. $XX inventory. million with $XXX $XX Operating a to and on million. remain

for about capital be to of expect X% to X% expenditures to continue We year. sales the

bank debt a total million $XXX million. During we $X.X of $XXX of our million cash on quarter, and debt, of with repaid amortization the principal ending net

share. gross quarterly for did trailing of times. increased leverage any QX and X.X debt our Our stock $X.X dividend XX-months $X.XX we first per to in We not million paid repurchase

Now turn to let me guidance.

expect hyperscale. remain by driven improving We and demand sequentially orders macroeconomic to strengthening conditions in increase across investment and semiconductor, in our strong market growing

near-term, on the industry-wide upside are our to in constraints However, supply revenue. components specific limiting

As $XX to QX million. a we're million minus guiding revenue or plus $XXX result, be

synergy points gross of to expect partially we We R&D, Operating decline are invest through in material $XX mix, to continue to and million break-top, by be end as last the see costs, million basis less the and natural annual sequentially, on favorable and expected non-GAAP offset increase to near-term in higher which margins $XX could product actions. year. around expenses XXX

As a minus to plus non-GAAP $X.XX or result, be share, $X.XX. expect per we earnings

believe will XXXX demand in and remain XXXX. half second the of we strong QX, beyond Looking into

new take share focused continue adoption earnings accelerate have remain half, improve. on grow to strategy conditions time. upside that, to supply With to revenue executing let's our we Given growth excited with across the over second well than expect positioned In strong our about chain your to We're and first XX% the the questions. X% seen conclusion, opportunities our more markets. over to we're revenue We if and of half gain current products. environment, ever Operator?

Operator

Instructions]. [Operator

Our first Bolton & Quinn Needham with question Company. is from

Your line is open.

Quinn Bolton

are sounds on of that to constraints. look the $XX the to that capacity revenue kind numbers. I is of trying to at of million quarter. other on upside just the limited guys, quarter, June due light million like June Obviously, the look you're there because million Hey I guess $XX the I seeing it guys leaving some through maybe you to of level mean, as And $XX that revenue for the expectations $XX on? million, going level you're Are Is factors the consensus constraints. capacity table

Paul Oldham

we strengthening seeing out It's hard good it’s we And supply QX. really would demand. based believe came certainly, Yes, get a we constraints, as that the exactly, factory impact about speaking we get saw year, what in question, for to quarter. can and Quinn. of talked the And really sort quantify parts in on some of our into we in broadly I QX. a Certainly and impact are similar is outlook having some we say

Now it'll when of that there up. become it and demand still catch quarters, parts probably but those is couple a take available, to

Quinn Bolton

first Okay. XX% the at if in X% missing growth. and what the And numbers second looking in you're and easily demand and second looks half could the pushes some half. just QX, almost just that's to in the It QX half like support

if of guess I forecast the And shifting demand some difficulties that the the so having I'm especially is into half? just second reconciling

Paul Oldham

because, is get and in limited the by strong some try availability the the of really half it it's and second forward look parts. Again, we color environment, demand to

challenge see underlying the of is quarters. So at move something like is mentioned. of to more this speaking, before, we site the better find And is that in shortage when what to practical We well, fact numbers. improves, drivers. underscores longer But runway, That's the as you it think it parts demand and that half the a actually that know, the by sets bodes parts ultimately that us challenge challenge as year. we point couple Steve if has believe, we at upsides the the broadly was forward strength as demand near-term things throughout forecast up the this looked look situation it's that industry-wide And the continued been in growth in then think for combining that think what of to growth although stronger and in we of forward this with kind half next the we we year, the second we could XXXX. supported looking

Quinn Bolton

Great.

power market The of just terms market subsystems I about recently, Power second question in I you for think share out in performed had data, talk in guys you the VLSI can is segment? share was how RF the XXXX

Steve Kelley

very take make still Yes, comment I'll and Steve. being is that that this We in thought see leader one. we're happy the undisputed look report all the on a at a I we to the did areas market about. that care

Process power are Semiconductor and areas the Power, power. So RF

show like things horsepower. the devices RF matching in you some last networks, power that revenues DC remote grew we RF If year. market expenses move generators, to and It also

very so a we've surprised, cross-selling vertical in And addition fact, extensive edge, products products, highly past vertical. we the around grew XX%, some for differentiated the semiconductor wasn't our the semiconductor Energy. launched year into to great revenues in moving forward, XXXX, RPS, We're foundry recent in was over Advanced our optimistic year, so

moving semiconductor So we're on very bullish forward.

Operator

Sankar with next Your Krish from is Cowen question Co. &

is line Your open.

Krish Sankar

you Steve that that same Is risk your is across I competition? that you issue lose might Paul to Yes, seeing the Or you're them, any tightness or have thank one this of to taking do you prevalent for top-line. think question. component tightness? impacting industry that's comfortable my the kind two component there first on of share

Steve Kelley

most you our Yes, across I is if think our of look proprietary. portfolio portfolio,

at So we industrial it. looks those are products, will largely so so if won't that the second that's you the and into statement made proprietary look half, shift why lose like semiconductors, we demand medical,

where probably on share business. risk more that in we area based only the is built-to-print think computing, of of business availability lack a is I losing center some data

whole, bit disappear. little But lose for we And speaking a of there's as can't the a think business larger in in company share that catch-up very that may QX, so will if in we there. area we little part,

Krish Sankar

done and did digestion kind seeing for hyperscale Thanks but in in enterprise data expected much computing, Or then your it. March are the drove like got quantify reasons spoke along what And March than the quarter? path; what center inventory regular you in you about of, just as follow-up, improving? and started around it, you a getting it just kind the how Got is curious quarter, a the Steve. same IT digestion revenues grew it turning of are it, I'm budgets the sooner

Steve Kelley

question; our address increased anticipate address towards continued the the we've QX, in saw today, half that's of more the think specific to the pickup what gearing general in seen going is let strong I we're quite up booking we forecast and for. from second data center, the and I'll end Paul we be what the center activities, the I'll But data question. quarter,

Paul Oldham

of Yes. didn't Krish, That break gives see of us to start quarter. end that sort to as the the the course year. a did this come from in hyperscale We we but digestion to out the see bottom stronger of through go earlier growth confidence and orders time strong change growth in year as market expect the we mentioned we of towards that quarter-over-quarter period. seeing the And Steve over

a of and market that back couple digestion So quarters employment coming now. went of through

Operator

Mehdi And your from is Hosseini with SFG. question next

open. is line Your

Mehdi Hosseini

say When meet I inventory ability that better semis, market, Yes, scale center. trying industrial look so new end the just the you that in just shortfall telecom thanks end appropriate and market to the set fair your my the was it perhaps that was seems for able market. of it semis to shortages reconcile Would you're revenue had to actually be and to in targets? demand you expected by I'm the the question. shortages subcomponents, me that than this to at the and hampered were the taking mix with to perhaps did data and trying it the

Paul Oldham

That's question, Mehdi. a good

we a balance, from we supply to everywhere. demand a you there semi, well. think, some the chain markets quarter in able our perspective. our impact even increasing had across to were markets while shortages during look I on we outages respond some power look, And spot as volume had higher had But larger

than So broadly couple more for of our advanced markets. by volume our are semi higher the impacted power shortages business speaking, businesses the

Mehdi Hosseini

Sure, first okay. million half and And Could little of we the assume is the a OpEx then then versus second bit. into in be you highlighted maybe that the up there increasing XXXX? OpEx couple OpEx increasing could continued half

Paul Oldham

numbers, costs obviously, year look all have in growth been that's the as annual then do investing you Yes, some in where you on. and R&D, at if that goes come the the we've

the be up you'd should year, So over it go modest OpEx see levels QX. QX forward we growth slightly after but expect to from as very

Operator

with Your from next Scarnati Amanda Citi. is question

open. is line Your

Amanda Scarnati

Good morning.

on the in data talked of to touching customers center growth? you that XXXX? order Just customers add seeing, digestion the last growth add customers the to acceleration Or throughout in quarters see expectation you side you need hyperscale outside the the throughout roll-off the feel and those of can do business, you've to some some to about expect year? Do more start two adding should been that of new the you to

Steve Kelley

think of growth Yes, Amanda, a the I our current the we growth because customers. separate view from issue, is set

As low of and we new volumes, relatively bring a up ramps start period it customer, months. we over our typically,

So from coming growth our existing the customers. we size wanted on to

Amanda Scarnati

this in the on the medical medical to and the step-up additions industrial COVID the we of related the on the pretty And the some see then specifically a year year? side, strong not side, year-over-year industrial side, growth of could side and business side, on obviously, industrial with medical last was on

Steve Kelley

for up year. pick a down definitely obvious both year And for every reasons. Yes, in they'll XXXX things And strengthen medical, industrial we this areas. think quarter seen both was think and I we've

life course So medical coming will two industrial we be of to think and XXXX. back markets with to those

Operator

Your Scott Rosenblatt Graham is with question from Securities. next

open. is line Your

Scott Graham

common welcome. changes Yes, Steve, sales the you maybe your the good Could your segment, morning. on the for here networking and, in revenues? quantify Thanks of portfolio impact time

Paul Oldham

Scott Yes, Paul. it's

expect of there'll lower. really that some XXXX, little and recall, expect fundamentally, most as and we baseline, from if late could down a higher, establishes called those it a some be of and in a go-forward this growth here, haven't business in as out post actions took kind you actions, we But accelerating level. a do see of some sort We we effect baseline, specifically. a think and forms quarters we into commented new to is those that go-forward, be new QX But this little we also this we'll XXXX, reasonable of was of it kind baseline

Scott Graham

the logistics Okay, for more thank hoping is of certainly and little everyone supply was feeling also on what shortages -- you. it. a have some I on the issues, bit you, color

being we that. maybe So if tell kind affected of sort Could least, listen, that's of are understand you sort possible? us of segments to worst which

Steve Kelley

semiconductor on we Obviously, biggest in we microcontrollers, is Sure. ICs other issue that We'd chips, the buy. that. to happy comment have

supply. would some other forms Second be third opaque ceramic Probably the ceramics, opaque are in substrates short is ceramic. and components of

And so with we're spending key a lot our of time suppliers.

the calls number long-term involved week going every find we We bringing almost new sources this agreements that out where second did We entire on me. includes of suppliers. in have QX that expedite We We're is could signed management them. stretch. and team key our in lead time our with

delivered towards QX. tendency to the we buffer we And fierce benefiting us those that customer advantage our in building of to think also capacity. start end some actions capacity, components position in of to some as our be a taking additional a that suppliers. for fashion preferred our these capacity. key doing of won't some of be And So vast requires assembly we're quarter, take We're because so a most factories. We're some with there's able in test secured the and going we've essentially, that's

Scott Graham

up up maybe, issues, there That's I managing a prop on little a renewed pointed you've think previous in focus the I anyway. little sort around, guidance to earnings I what SG&A out And frankly, supply is into the sequentially, last of chain to X% kind be said you so the of I while R&D, half bit question were expecting we second have to going materials and half this we're we very sales I the down think, of will, through guess a more half. as was were question all also transition was just second have you. sort if before, we helpful. as Thank the bit period XX% guess we're going second wondering, is higher something the business, these that

does XXXX. like into it look this moves So maybe

we this propped up? sort earnings next SG&A try do how these handle during So quarters keep three of to to

Paul Oldham

question. That's a good

look pretty the much last we've over time numbers, reduce able normally SG&A. you other would from wholly four, been even to As SG&A despite the that quarters, pressures, increase five

we So to do continue expect to that.

to leverage. drive continue We year. in fact, we go And to percentage lot to a a expect of the down want see course the of as SG&A the over

plan, our is execute transitory that that to think the of other committed So Clearly, into our that model synergy we in drive we seeing we're well our some And of broadly the back in headwinds, something we deeper and been on. continue end both of list growth. this both will as then period heavy as target completed OpEx time. on we're going working have investments of growth future we're in those, a by R&D, [indiscernible] and next we kind the to as exit speaking; We've factoring. year. year the year We're the

Operator

Molchanov Your next James. with question is Raymond from Pavel

line Your open. is

Pavel Molchanov

the Thanks acquisitions, smaller industrial especially in in some current the if that given this tightness, for supply the potential broadens particularly industry-wide taking In context curious target suffering vertical, of might the questions. the be players, the for list I'm that of climate?

Steve Kelley

buy exercise a to the smaller would right to on a we continue and can we that be haven't synergy, about companies be comment, general and leverage our But company chain. I if in look we supply really I But thought a way. just continue guess opportunistic, come acquire. for to that

teams, in you'll to a stay be companies area, for active products think medical technology, particularly for and with And tend opportunities. I to that companies looking strong industrial are strong proprietary. we'll technical us see semiconductor, be so, looking And that sticky that exposed

Pavel Molchanov

impactful thematically, see? there of be business relevant, would your in that you kind proposal that infrastructure the to Biden anything More directly is

Steve Kelley

that I trying so interesting establish happens, a see to more investment demand solutions, semiconductor are the U.S. part manufacturing if that us semiconductors, enthusiastic creates that we part. And for think obviously you the that and process stronger additional very basically base. in is on that so happening, power for most even

Pavel Molchanov

some verticals, from things metallurgy industrial glass other maybe industrial And benefit a of could more Right. sort active that and sold and policy? the you've of into

Steve Kelley

Yes, of I'm you're the at hope this semiconductor not really familiar with point. the details correct. I But

Operator

[Operator Instructions].

from next question Your Berenberg. with is Paretosh Misra

open. is line Your

Paretosh Misra

thanks optimization for opportunities look my taking structure your the for see But the I especially you you as have. different opportunity at Advanced do cost cost manufacturing expansion? and facilities know, had are at you morning, a much there question. at margin Steve, to you Energy, Good haven't could cuts footprint, that or that. look And that further that drive

Steve Kelley

Yes.

Malaysia manufacturing factories into our So we're the three have China, centers one consolidating in is location. of company's one excellence Chinese basically, we in in is is of the one and one in process Philippines. And in the

Shenzhen exiting of this year. the by be So end we'll

probably familiar with you're that think I project.

our comfortable, to factories that Philippines forward, China, utilize we those those in having I sites. of operations of each expand and be have businesses will the our get to and we're in to point moving and each think, ability try to place, to there fully Malaysia approach very the

positioned. So pretty think well I we're

Paretosh Misra

Understood, growth? a maybe bit and talk you're two orders you revenue seeing about seeing that. particular more follow-up, strong or and where if versus which you're any revenue industrial what on thanks any In And of end-market growth, have words, strong for could as medical faster do sub other your sense medical, a seeing. you're you to segments segments industrial the as

Steve Kelley

smaller something medical. sized medium like wants opportunity typically companies, comments industry some markets and sized Yes, so to reason little bit and general smaller those opportunities. I’ll and I make two about medium The different. much, But each be they tend a

relationship our good then So need. or creates situation. we we with products, AE sticky take standard very a And creates customer; to it that products a tune we product them between -- the the customers very and configurable start and

So typically, lifecycle these applications. applications are very long

And those more going so opportunities. to look the shipper, the continue years, once we get market many, discover so designed in types of and to for many to we're of

Operator

Weston with from is KeyBanc question Your Twigg Capital next Markets.

is line Your open.

Weston Twigg

for thanks taking Hey, question. my

wanted to that with little exceed you I quarter, year, would didn't I Last it it again. you're QX, First, said and for you for mention gross XX% margin. just down a the think start guiding

just I wanted the So target that year? the exiting you if back hit to XX% get year. gross still thoughts And of your the can margin on half think you in

Paul Oldham

that but as we think broadly of -- said, didn't ago. chain we at transitory to I long the headwind year, and or and I certainly or we always goal, that's like two better manufacturing as that's a that range. been that's Yes, kind that of We supply execute our see sort we exit [ph] like consolidation, it's that, quarter we how could that our XX% do. think something like hard a believe Still, it's constraints logistics think

So we with year COVID, are XXX XXX headwinds with even are And [indiscernible] are the to maybe very I'd more those channels full, full. basis say last some, points. reimbursement that that think COVID, and than things chains logistics the other what experienced with look, we very supply

at model. to our to we're did we on the that be we close consolidation, manufacturing feel be target in we'll finish face these interim, both And sides. going able headwinds So our, confident

Weston Twigg

upside little a driving second and the growing as help would segments revenue just us could Okay, you which a growth which us that makes understand semi the half you that you are when because about understand, data second ones can half, in yes, And cetera to stronger help sense. that be talk are the growth if faster helpful. then in relative half et first center,

Steve Kelley

in good quite all is we've news The strong sectors frankly. growth seen

in in So we semi The bullish head XXXX. half second about just into to essentially. see very the customers we are demand the impulse have the the semiconductors, sectors

going there up strong. on back coming to medical is the I going center, be their a we challenge Industrial strongly through to and our demand. recovery just be think that Obviously, is So that's half. see we will second data with and in comment going phase keeping very

may and not the I market see think growth only is best networking. probably telecom we

for we steady in of some XXXX. stay we'll think designs, look Again there. I revenue XG as come that most think probably we

Operator

Kelley questions no have for at call I'll to closing remarks. turn We further back time. Steve this the

Steve Kelley

call of the from exit issues markets see commitments suppliers much. the increasing that the second very year quarter, limiting half, attending high at we supply high thank Well, And could XXXX. our are the demand outside see you rest across velocity. with very for Thank the today. we of much for We all you in second although our hopes very target increased

Operator

This concludes conference. today's

You may now disconnect.