KTCC - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Key Tronic Second Quarter of Fiscal 2018 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Brett Larsen. Please go ahead.

Brett Larsen

everyone. afternoon, Good Larsen, Brett Officer Key of I Chief Tronic. am Financial to I joining thank us like today call. for conference everyone would investor for our

Gates, in headquarters Executive here Spokane our Craig Officer. me Chief President Joining and the is Valley

only financial always, such regarding during course Actual that materially. the future predictions. this we events -- remind or statements projections future of this might course or I make results would performance. the other or As that may to call, you are Please like remember during forward-looking events Company's statements differ

discuss outlined you the with information statistical For review latest X-Ks. call, more information, business historical may our specifically regarding will that SEC, the the XX-K, operations. filed financial risk has and note factors XX-Qs and this Please in other Company Quarterly and our documents on the we

Some and information ended be we release second for in a call today's on the recorded released our of press will is this Today, XX, XXXX. website. results available of this included our December version quarter

For of million of $XXX.X we million, XXXX, period $XXX.X quarter fiscal reported to revenue the fiscal total year compared same of XXXX. in second the

six first was million, the fiscal to year months XXXX, $XXX.X in fiscal total same $XXX.X revenue million XXXX. of of compared period the For

same For the was period of X.X% of X.X%, the was XXXX. X.X%, fiscal margin in second fiscal quarter and compared and operating XXXX, margin gross respectively, to X.X%

demand with coupled of Our gross new customers, margins costs be continue wins. existing to decreasing the by program ramp impacted with adversely up associated

to volumes. of get has exacerbated from the to new the it previously our Many facility these production involve ramped taken full programs transferring than slower of EMS has time ongoing production the own, which have anticipated. which Some length competitors of

utilizing gross margins We expect programs further move these as into production see capacity. production, full gradually existing new to improving

Mexico. addition, we're costs and to taking streamline steps operations in our reduce In

recently production require labor existing the equipment programs will we less As content. won, and capacity expect new fit into

expect we be X% Mexico of the beyond. will total approximately cost these the reduced As efforts, by and a result by quarter in fourth

impacted supporting competitive significantly to per and U.S. of un-repatriated quarter. continues profitable second programs. results The these further December for a foreign We $X.X in facility to a Moreover, programs to current Asia be overseas charge write-down the U.S. provides proving tax expect corporate China in we GAAP are see a and XXXX option increasingly Our be totaling facilities earnings profitable, of locations. U.S. a tax share reform and growth and our tax for locally during our sourced for deferred quarter the manufacturing exchange discrete certain related adjustment $X.XX or XXXX. to reform million assets had in

of result As the had second companies $XXX,XXX loss per these case, of share. a we net our approximately charges, reported other we net In $X.XX like loss. or a in quarter, tax many

discreet would the these to net $X.X per approximately income of for quarter $X.XX XXXX. tax share Excluding million share compared have net $X.XX adjustments, per been or fiscal or $X.X of million second income

of was X.X net six XXXX. of or per same period $X.XX compared net million million or share of first the For per the XXXX, income $X.XX to for months share fiscal $X.X fiscal

to have In Excluding coming the or in through tax from the for of we reform first income benefit our six XX% a adjustments discrete quarter, second million the that tax XXXX net going fiscal XX%. per share. impact occurred reduction $X.XX from during of to effective the the would months approximately estimated tax quarters, rate been expect X.X

the maintain we unanticipated a sheet, continue second in position a of to balance to strong result financial as delays and ramping during new Turning the programs shipments quarter.

quarter. and at quarter were from second our the X% also X% approximately the end increased previous previous inventory up the from quarter of the receivables trade Our

by debt payables to million managing through compared our $X.X we reduced the second However, during quarter. the prior quarter,

Over a loans and at quarters that term rate. of and the the credit our revolving Note we continue term, line the recent expect former be of levels resolved to in have receivables customer, occur million do inventory $XX similar expected down paid pay schedule binding inventory to a during to third is longer and from quarter. purchase which and receivable by hearing arbitration the roughly included to a

do the at pursuing other expensed to believed for formal products customer. addition be already from arbitration, carrying cancellation certain the In inventory fees to issues are reimbursement and in contractually but the we

continuing incurred. the of or costs losses, results not as position, financial a in material the in have of inventory could flows. delays levels program the claim, accrued in arbitration, on levels this our to of and more are any new ramps cash result as of being expect effect we outcome periods. ultimate and loss. for which eliminated, a Irrespective come operations related are line matter and reduced revenue shipment outcomes disposition coming unknown consolidated see could this We or to net Legal in The expensed and gain gains one-time with are gradually any have

around fiscal $X.X DSOs million we expect and XX through were capital the CapEx for XXXX $X million. our expenditures to days. second full approximately approximately to remain Total expect be the We consolidated year quarter of

but SMT, moderated our recent in plastic continue more than We and to investments a metal, level capabilities, in at sheet our years. invest molding

programs XXXX, production. fiscal more Moving our ramp we to of move of new customer quarter to into third and the into expect

million. to to customers. we factors We of anticipate revenue quarter our longstanding $XXX in expect third the a Taking XXXX into will of of continue few fiscal consideration, have range among these the million that $XXX softness a

This charges Taking expected related the by million growth and customer. the approximately hearing the In rate quarter. from anticipate we're due third receivables earnings in for earnings our prospects in expenses binding quarter, the breakeven into connection revenue effective the we to million to with legal XX%. Furthermore, a related During range $X.X to facilities anticipate arbitration we been summary, for also assumes cost future just former in of for factors mentioned share in per for incurring an range and paid severance earnings. streamlining inventory these encouraged Mexico. we've the the $X.XX consideration, third of approximately $X.X of

in We forward we is to of are profitably also from resolution term. new positioned upcoming longer believe financial me, the to to to business overall health schedule and well strong our win that Company EMS the arbitration. over look continue the That's it The expand and Craig. we programs

Craig Gates

Brett. thanks Okay,

to unanticipated recent softness XXXX. new we quarter forward, delays programs fourth customers few revenue the in we've contributing expect and new new more revenue While contribute had of have won are with gradually and some programs a we our customers, fiscal to overall among longstanding moving higher to

the a customers ramp quarter EMS we two Things for significant new the competitors During discussed programs new consumers and finalized. established continued yet second for win devices to quarter, and products to the of applications. Internet last product new involving to still commercial are manufacturing relating consumer The business of involving from security details including be

revenue we year, and Moving a profitability acquired after into business. trimming continued increased the new two to during non-profitable from continue quarter potential this Kentucky we're pipeline ago closing facility We're years our was Key which see over pleased in to of and see Hertzberg, planned you'll and strong extremely strong we Tronic steady from molding recall growth We facilities. third production seeing programs East, highly a our while S&P growth. and in efficient U.S. significant managing built expected to both in metal enable are believe a of future this and growing carefully domestic same the Mexico sheet value our east. plastic appetite investments reflects that are time having At the for products expenses, the U.S. capabilities results

see a new Moving potential further business to into strong continue pipeline we fiscal opportunities. XXXX, of

While uncertainty in new there continues market, be award companies to continue to programs suppliers. our to

often time supplier us, business to to transfer that have We it new have supplier. takes from meaningful but several customers moved to revenue

a not business that of customers incurred we us. already As come new as transition yet margins the the transferring facilities and the in will winning result, enjoying while complete to their are quoting, expense

potential a tide Mexico Moreover, American one and of as and impact well forward, production our analyze significantly by correctly push both overseas customers and North the for is positioned U.S. the more production for based base total slowdown diversified Going risk broader cost of returning any the the lowers Tronic Key customer. in they customer

of excellence boosted by our manufacturing EMS to our of competitors multi-country pipeline our the size. be to business unmatched vertical our of of integration, footprint continues and steady level Our opportunities other sites new in comparison

As OEMs mitigation Key risk face certain increasingly geopolitical our with in Tronic China, landscape, in located to equipped the an is U.S. offer facilities Mexico and manufacturing uniquely

programs we to expect business. improving potential new Moving and strong many in continue new By growth of in margins. revenue to and XXXX, quarter, see of fiscal several we to ramp our new quarter pipeline of on-boarding anticipate a customers up continue and fourth third the of the

capacity with accommodate customers and our remain programs will revenue be new about concludes This and our presentation. and we Brett potential of pleased grow strong the and I our believe our portion Overall, beyond to operations today continue answer we optimistic long-term, growth to increased the diversified more levels competitive questions. base. now customer far the opportunities your formal Over strengths. will to our a

Operator

take question Tieton Capital. [Operator you. Thank Bill our Instructions] And first we'll from with Dezellem

Bill Dezellem

of of start range Let's of quarter? this What's that the you the normal -- the size question. here size had my with wins

Craig Gates

First one very to the second large. X one is XX and is

Bill Dezellem

to divide one -- you'd do you into the give? have very equation does like large or How range act

Craig Gates

ramp little bit more sure thing transferred Nope, we to the us make I'd like I the potential full this to and before a fully number. a see understand commit get and understand

Bill Dezellem

to did into and that you they we have to results, alert last December everyone happened, that You happening? report? that that's a the that in on quarter that good make an quarter's client impact question if that another lead maybe prospective was earnings reference to a the case relation that, would Is So, if had. could

Craig Gates

Yes.

Bill Dezellem

a process? customer indicated revenue results that the you and the of update that quarter that lot it's in where nor alive of kind is prospective see the this about with if prospective like didn't if you And customer? had had that been is We formalized, that did customer. release from or still alive, Would still a press looked whole that it even talk

Craig Gates

volume. the MSA as We're in chain of chain quarter that ourselves. with ramp signed transferring to in the that customer. stands incumbent we're from the Sure, supply of we their supply significant transferring an release, today, a a midst press in ago, have the And we supplier it in as said midst

on to it's all players out PO complex us. supplier, what as stuff the figure with to at who's always figured to get shipped supplier right page which of out has and So, which what which the get

like excitement the a transferred trial of in is the work a any getting knowledge It our the lot forecast has about chain way. of it's getting of terms work. case and So, program and a revenue transfer in the in progress, always not but diminished supply is

Bill Dezellem

anything hear that the answer didn’t So whether customer very that alive that that, much question is is answer we not, the of since customer is definitely disappear, then.

Craig Gates

Yes.

Bill Dezellem

customer that is that this two And had referenced, one you that of you the quarter? one

Bill Dezellem

Okay.

kind why lose of real on a a of answers wanting little really this point? So put you’re not to it, that question bit specific it’s the number at

Craig Gates

Right.

Bill Dezellem

completing information are you think, just do those [indiscernible]? you’ll When that variables about know more

Craig Gates

been As you intently can this we’ve making on focused frustrated happen. imagine, and very, very very

as look quickly We here. we’re it’s other and we ourselves can, and joke day As at we’re turned risk been. share say, than not we’ve every at we’re putting closer ever each making we into outstanding

can't production. I to sure into for we’re tell So go you going when

we’ll but be months. of thought kind weeks, that a have couple any two of think last production I in into I

Bill Dezellem

it’s everything you you’ve me say, to paraphrase think some cautious degree everything you that, quite heard being this been moving just looks and if forward you’re guessing, like burned felt is large result, to you’re to point. is like have will at this So, is when that as that going what allow ramp. go. And a and though, is just that, I just when Even you it I to

Craig Gates

been haven't burned. I Yes.

for said sure. to haven’t we are We it do going

any We’re disillusion lack of players. have or very cautious with the and trust we don’t

grown So that impression want give We of people I know case. actually don’t that’s to the better. not to because have both sets

FedEx it think chunk that we the or was going in out into is made just the lost them parts the UPS devils it and they're and do. today, see get somewhere. trust where part as quite to or nobody of from and But we we're where found came they're in each container to continue sure, get somewhere details We any we and going and today, thought if to

getting big supply say going as their that’s up. this them of very kind we’re that’s chain to I of going would bit And start-up mayhem, think, linear. a to we’re we from So and control helping a basically company late-stage and little everything under and gather start-up guess company time mayhem you transform

Bill Dezellem

numbers quarter, equates charges pennies negative the says to we guiding if range? to of about arbitration that the that result, I’m couple and a as and would exclude questions. The that you the March then charges any $X.XX And for a X referenced $X.XX impact or that doing have exclude math in be positive those

Craig Gates

That’s correct, Bill.

Bill Dezellem

cost And then, reduction the do from ongoing in out What to Mexico we future? as anticipate those start initiatives the you savings that the you to referenced. think be into

Craig Gates

Yes, and labor the and content equates to forecast be expecting with based about at total production roughly that we're reduced in taking to that ought $X of X%, look million in our revenue Mexico about required a our quarter. close and exists, capacity that which currently by we're current change facility a costs some on

Bill Dezellem

up something quarter a And neighborhood a million being annually? $X.XX the in ends of share a dollars

Craig Gates

today, we as out pans everything if expect Yes, yes.

Bill Dezellem

up ends being that number. a big Okay

that would up the savings? that $X.XX and you the really earnings you about degree, you're of anticipate it business where talking it? or that take what to Or on some of your top an growth addition would add problem the consumer of of So is chew $X.XX

Brett Larsen

I problem a you? call Well, would that wouldn't

Bill Dezellem

Equation?

Craig Gates

reasonable is that equation. hopeful We're an addition it

Operator

with George Melas Management. Next, MKH we'll hear from

George Melas

the do going to to excess per Or are Bill's expert of down some there continue Is revenue? of is along little try significant cost bit capacity because I'm to anticipated question. you that is if able million In just there line of related X the that quarter. Mexico, by loss sort now? How that? you roughly to take

Craig Gates

not of it's -- loss to revenue. to related significant the It's related

capacity the it's time controls better systems not the of labor to level so business automation, less touching that the at in the of and direct the hand workforce. in requiring to maturity requiring it's not better And one people related again it. terms products getting manage to control as excess it's under and and above guess and due over I much So, much rework overhead due requiring to facility are the in

George Melas

colleague have you Okay, through so largely lot hopefully lot on have going a and and it is you're in are sort that ramps bodies sort management fewer be because overhead lot have ramps these in going a of of that a wins? of ramped, to now capability you going management better sort to your to of of of any of sort

Craig Gates

And a not due that they as mix -- Well, of throw I'd in products as when your say it’s in better it's partially also many down better, also that to fact controls there systems are its partially, the it's shape, as bodies you the were problem. to at originally. are don't have

and people lot But integration as So, a and the driven of rather quite than of labor, are have and and mix handlers bit the things of make down given two controls parts, on and that year. we've looks lot pay to that practices the best East the of every And Company been particularly is them we've facility we've revenue. to that number beginning we've a of across direct are doing over the people these the that West, that Does revenue efforts that are terms achieving sophistication taking off like last a technical the revenue. spreading as the going changed expenses the now been in and it in a for and headcount our adopting in amount in of sense? been of supervisory salary

George Melas

did Has both you software equipment Yes, have process systems? to been it does. and improvement? and in it mostly Or invest

Craig Gates

report of systems much systems We've the pretty the the more work the always and between processers at Spokane we that It good that the hasn't maintain of we process It we whereas report paperwork, been way as been with we that. was that the that way way way the improvement. management way production. we transfer the the way production, track east, the that labor, products, in

throw you free, want to to gone business let's and offshore in essentially a All more is in of of to are people locale. we would we've just more of same some that, really crude tracking people and sophistication that need and the it, systems simple basically our offshore implement you model if increasingly level people the becoming and way expensive it of from think all that expensive at in are old

George Melas

Quick question, Brett.

had large will the be what your how also you guys confidence dispute inventory customer, with maybe talked much in You But would your And to the answer you to that. actually costs former and arbitration? could be about related that can claims win have you cancellation fees incur? additional that carrying

Brett Larsen

lawyer pointed remember. room mute and button. have finger to we with the us in When our his the the is is got finger over you place, George,

to you know that. So already on what say

Craig Gates

tried more to we as say. not as could. we can really say We there's Yes, much

George Melas

That is you all that of that in-house, some say wouldn't be you spending that confidence could money, level you had high to win. safe if pretty

Craig Gates

sense. Well that makes certainly logical

George Melas

tell quarter? Okay, the much logic you top X us how revenue good. X top is and the this Can contributed

Brett Larsen

give numbers. the up look Yes, us a second to

George Melas

other While answer, Brett the is looking me question. quick

your rebound margin really a just are too quarter So Brett, What the expecting previous improvement? long-term we for still margin I XX in want the bit next quite to levels. X% months, a pick-up gross below little sure what that see growth high? of don’t is, of the But but gross made margin the sort you -- see bit get they prepared you to Or last a in a revenue guys is margin? back and to but is quarter kind could targeting? from that is did you've fourth start of remarks. to your

Brett Larsen

No, I we think can't.

reasonable goal. to we’re if out these X of a and think customers, the growth very from in million add you whereas, revenue some If new adding that quarter you save a that’s going I

Craig Gates

Top XX% contributed I of revenue. George to-date looking And just quarter through around our customers results. three the

overtime. has changed really not that So

George Melas

with The top customers XX% you three said.

Craig Gates

correct. That's

George Melas

right? quarter, XX% were they last But

Brett Larsen

Roughly.

George Melas

requires or… Okay. XX go to Is anything an XX to explanation that there

Brett Larsen

there We some in revenue think discuss we’re customer with some as replacing ramp. they from now I and longstanding that were that new customers softness program

George Melas

component is shortage revenue last still customers? impacting talk Okay. you the about and guys in gross production that And Is in that the margins and quarter. just

Craig Gates

and yes yes, yes. Yes,

George Melas

Okay.

Craig Gates

including of it’s And fact to and it by rather now got about year actually was better. years computers all ago. roughly is the to worst worst X pundits in us, been driven there it’s industry-wide, year XX be car, And half. It’s next the through every going that than for XX it’s

George Melas

maybe to… or being Specifically, short want don’t what parts are particularly you

Craig Gates

electronic the the all are even issues dials and speeding processor Big and now spread like into and the registers problem. started But micro whole parts specifically things that.

George Melas

affecting way in big largest Is that of sort Okay. more a you guys that your competitors some than of purchasing have power?

Craig Gates

don’t I so think customers. buying are their competitors larger again because the for

has the power customer the Just a competitor. not

George Melas

Okay.

big. I’m question follow-up And and quarter. from question, Bill’s a Last really Okay. customer. going just controller, to then signing mentioned, quarter, strange could be That to to quite ask you’re up contract potentially you is equipment exercise which last

said you about million the think I in XX XX still possibilities, now ramp. it realm you million know those that customer? could little to a bit more of Are fully that

Craig Gates

Yes.

George Melas

good. very Okay,

Craig Gates

remember the again, answer a this question is long small was, going ramp. be of But to the

George Melas

ask last question. Okay. And my then, I'll

As that or have you documentation, is their good have business the other manufacture. think they case? new they processes would ramp good somewhat a would manufacturers, to coming the facilitate row, Is from in would contract not that taking that transfer some from would docs

Craig Gates

contract OEM an or that when us. say, Then documentation. we’re us. you’re competitor better coming is the get it coming It a more to better from can is of from to to certainly It a case, we’re is manufacturer case be it’s when the going chance I’d

real happy competitor, hand, got other not about who’s the On a something. losing you’ve

we OEM help. the maintain So, that design a in of advocated and in lot documentation. to there has not his his completely own cases, is And many responsibility find

try is years it’s the for with a product, month. from shelves and XX more us, insurance quite in exact just OEM go on complacent one original saw been particularly And the if the been then pull in and with if suddenly that could the just he to that OEM. been you bit other OEMs it’s last Then supply. experiences CM XX So China having an to from is his which when documentation problems our the it’s information of got than he Or keeping unpleasant of up. duplicate, product that, and worse save more discovers money in and it a has come or or with

Operator

Associates. Next, we’ll Grodsky here from Sheldon with Grodsky

Sheldon Grodsky

has affected China? products being Congress if the know don’t that tax by be coming But of I you are about going diplomatic out plan tax or you’re passed. any to excise Mexico from

Craig Gates

this specific At orders of same continuing are excise of down affected of executive growth products we that time, have current we any None the taxes. point built. our recent the in

Sheldon Grodsky

think there China. passed what’s some for was as, the So in most American in were Mexico secrete you bill not remember, have there But threats double that any is as and that manner don’t changes far such it. tax about I imports idea,

and So that far, additional course don’t taxes because on see pressure excise you of China? Mexico any from

Craig Gates

of rate X%. know or The you Sheldon, and worked we be reform, to those tax by is while at in is is decrease China I and but loss from we'll least much thing that as effective do. we think there tax cash are less in correlate, as Mexico -- significant definitely point the on, negotiated at minds tax as kind probably be this benefit another our Tronic, excise continues they Key which and will fact paying two separate events is

Sheldon Grodsky

was in company this increase the quarter not Is taking you them? what inventory produced The unplanned.

Craig Gates

We case effect of XX% so was inventory. it. -- had had the couldn't and of value It for so in more we we we resistor, one couldn't one, last build the except of the get every part

the inventory. of other All that parts

Sheldon Grodsky

Okay, okay. so stuck, And… is the inventory

Craig Gates

to time just door. it's back and last the necessarily, It last the we part out that in was stuck. getting of of permanently not were built delayed inventory get part -- the in It's

So, as these…

Sheldon Grodsky

supply we our century, happening what's to chains XXst us, The can't manage anymore?

Craig Gates

take to suppliers, up not IC it with me. have to going somewhere, some you're Well,

Sheldon Grodsky

for Are kind last will from be. there of -- today The money you? counterclaims question me regarding your for asking arbitration, from are

Craig Gates

more have on We arbitration. no comments

Operator

has Capital Tieton of Dezellem follow-up a question. Bill

Bill Dezellem

pin on I clarification and try discuss that little a to something some am to down you going I like tighter. to would heard I

about was the million then the not X Mexican but question in a but my think I million quarter bucks year? X.XX came of X response I heard up, to different, one to split quarter, that cost I believe here savings, that million to if the questioners a per remarks the that's other answer that later per in

Craig Gates

million X quarter. a a It's

Brett Larsen

Per quarter.

Bill Dezellem

my apologies hearing. understand for I poor

Brett Larsen

I am sorry. It's probably [ph]. Michaelmas

Bill Dezellem

So in you ramp ramp Wall long the had is reference month. a your slow to ramp control, we Street, think equipment long exercise world? the with don't a long is regards What

Craig Gates

the now sometime phases. that middle we've through actually into its first production that the -- then products win some designed of right design one product the So, we been a long QX new production awarded us And to time some is that quarter time will that's is there'll so expect in ramp be our come just into that go to final over us middle QX. and prototype of years. two to go more also, or will production into we'll going go time It'll our

Bill Dezellem

terms you a our of in would that keeping normal us And expectations consider ramp of level just contained? properly

Craig Gates

That a ramp a six product months, is reasonable. is longer one a existing not I taking else bit months quite is And an nine yet than when than because somebody taking we're to little product a from that over over normal think we're more designed.

Bill Dezellem

about help cetera? from the you does so control Now, begins having that design a a if having process, also ramp blueprint, you're actually when loss to the customer a production though in come et you’re of surprises quicker with involved not

Craig Gates

Yes.

Bill Dezellem

the And one I thing ask the should that about you release made more I little was in think about And thinking increasingly about About that? in other to you talk be how want a on the reference U.S. remarks. and operations we the your opening do becoming onside then profitable, we that? bit would press

Craig Gates

steadily Number how the systems that and about, also is east. happening we implementing all to programs implementation to East revenue management people Meanwhile, them. processes we’re in able And the and and new less talk Mexico. Sure. of that management/support in the of winning have the one, we been same in on, achieve with

seeing are overhead therefore and more profitability. over and higher of we revenue being So the blanket spread more East evenly the effectively structure, driving

Bill Dezellem

that business correlated? you they that referring not winning and that so reading you’re two system Great, improved actually these and more are hand? to. to implementation actually hand success as go Is Or having

Craig Gates

shining up a the part and death Certainly, existing can be that of without facility a the of and bright all is spiral. stand opposite systems any of shining with hand audited bright and processes and waving

So And great last and Over This labor taken be particularly you to new in customer, who’s and looks management, the ago. rather that’s neutral. think comes another year when weakness our you now, we’ll all that price. really, in a had be customer business all in And marketing. facet mean in as bad quote and point six spiral. that final got be new taken cog line getting that that a big you He blah, probably than and last in blah. piece and we've buildings good call you’re say pricing of can into the you look and that a bringing and kind great lower spiral. I've rather of to from of death most a out we’ve paying clean I world-class the some have from just are momentum inside to of able U.S. before, a happiness to and leap XX-year, kind And in up into client is, years did of wheel and job that process broaden blah, added in, brings your quoting customer, business our business. to need my and a more machine and just really that excited guys and hear those can a bring the I they than am months happy is machine processes the real them been run And twice XX death fast a than that swirls about a death it. personnel business

Bill Dezellem

on would. more, if expand So a bit that you

as and process the long as seems simple here. ignorance of terms as I’m part expose to though quoting is my It In don’t. going you the

Craig Gates

wrong, so let you I finish. couldn’t You’re

Bill Dezellem

Please.

Craig Gates

is horrendously replacement particularly pretty we've it’s not we’re quoting, All done. a you quoting you’ve because PCB, PCB. and can out stuffing assume The a that doing quoting much $X.X code for and been us, process you can is just difficult, just crank your a

Bill Dezellem

Right.

Craig Gates

niche a but do as time as to it's an as business machine takes we've seen, a this sticky takes In time example. It it. of the a use long you grow let our to wonderfully swap long which

product $X,XXX custom. most could got a you $X,XXX piece. of from And to product So per that the are in anywhere parts that cost mechanical

stands form they to this have of are coat incumbent line a talkback is typically coat in does you currently a then paid goes of critical a that millimeters. over it be so custom black is bill that on or in items And XX there a it’s it out and or it the they figure the engineers that quoting if X,XXX customer’s materials And bunch is saltwater? quoting be purchase against. degree to engineers on. is my by probably up have and typically individual perfect, between it, that mean in year XX,XXX in years this to the drawings bend, that radius log XX has a did and we’re is saltwater and just And on on are there’s black and So and critical that

the and that manufacturing each well Then, figure a to weeks actual the on documented. inside we are he is there the So prices what of of the price out processes inside track track have these performance. not of couple each of has this go typically components on

typically to So to is many of that’s they a a hours I and what’s how put going figure print us together part, who out, manufacturing engineers, have things get to have take to from this and even have and And mechanical tested. to prints they quote electromechanical product. from team don’t required

that, And so if you want…

Brett Larsen

No, I’ll go. you finish. let

Craig Gates

lot customers you guys but So want Key any Wall of to pay reps, marketing if contract you for ads ourselves the our in Tronic see we of way. Street with terms we and manufacturer's don’t marketing gain Journal and think trying that of expense our to a pay our in of all all expense,

Our marketing expense is mainly coding.

Bill Dezellem

complexity. highlight to helps really that So

from me question. the save you with glad I’m myself so And

take have you’re that make going you What Let in that is doing material now me your is clearly, things last step most light excited you when your forward? one now which that said believe to you the not be intended a about in process a and this comment been difference to was better you’re will decade. comment further the understand. of success Because it’s

Craig Gates

can So systems sins a on in you undo page together past. how out the the and years your figure to can people the of be if your same lot automated, of XX this and

customer part, that but has example, So, to let say whom from three so can has you in me approved give buy we he let's one one his part vendors that an put product.

has then so, A, he have and A two but number got four. And two customer three another number part who part with and three. And we vendor the one, we've vendors vendors and uses approved same their

making three we sure So, take happening by now the what's throw advantage Key us two, vendors how on to a with case Tronic figure that bag out has and and while part in out, together demand like something of someway four, for one, the along today to parts. vendors five don't shortage with volume comes we A, can linking the

you XXX,XXX of don't the think that if is. parts, times what remember I I the number its So, can imagine complexity

it's look supplier is us part is say, A, mean will Just ability three, automating our the another more one. massive use let guy this improvement got but like I three suppliers to that quickly we supplier expensive quote than oh,

one. and he call if okay supplier him is Let's back say, with

on piece one that little of automate. we everything goes that just So, that’s can

the Mexico's And process let is mashing East some almost system that automation them of cost, and best to the together in of kind catalogue doing crew catalogue catalogue from has the everybody been parts, automatically, the price something and do is from past best this parts, then elegant. and of we're share of China's crew ranging so and to parts, we've elegant moving

Operator

session. conference question-and-answer remarks. will closing the for conclude will Gates I Mr. turn now to the That additional over or any

Craig Gates

look Brett call. and I speaking next day. to Thanks thank today's again Okay, for and again forward you have with conference a good in participating quarter. you

Operator

call. conference participation. your That you does conclude Thank for today's

now You may disconnect.

Key Tronic (KTCC) 30 Jan 182018 Q2 Earnings call transcript