BHE - Earnings call transcript Q1 2021 | Benchmark Electronics, Inc.

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Operator

Good afternoon, and welcome to the Benchmark Electronics First Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Lisa Weeks, Senior Vice President of Strategy and Investor Relations. ahead. go Please

Lisa Weeks

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

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

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

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

discuss first results, on and summary, sustainability. guidance. our new to-date of wrap including quarter and first will and call, Jeff cash quarter sector progress Jeff summary detailed balance with results, today's outlook including quarter then wins. will second and begin an program by initiatives, our a up strategic sheet XXXX by ESG market a covering will including Roop For our

today with the Q&A. conclude We will call

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

Jeff Benck

thanks we to our start and call afternoon, Good Lisa. everyone today. joining Overall, solid a XXXX. delivered you, Thank for to

our out demonstrate to $XXX the global in QX, our which grew reinforced first the laid revenues commitment our executing quarter, continuing by we to results the above were continued for led have year-over-year. of strategy strength Our midpoint million XX% quarter guidance operational Semi-Cap excellence. of sector, In and

Our flow of customers. which operating $XX of of flow were million non-GAAP and Despite facilities $X.XX our with people, operating was per free of in all working million our results as margins gross cycle that amazing forecast in cash job of temporarily COVID of significant of enabled line due our X.X%, shut-down cash $XX our had delivering We margins non-GAAP cash X.X%, guidance. and strong quarter conversion the and XX days, share some for for quarter capital at teams our another two did recovering an Malaysia, for disruptions of caring in the our quarter. to earnings

in here of our to first and countries Please COVID. while really and to Our COVID US challenges across to taking leadership actions continued pandemic the Task the of vaccinations employee the our navigate organization we encourage and through Force other are successfully solid deliver our four. I'm turn in vaccine slide as to results, navigating the available. is continue around who proud world the team population

pandemic. environment where in had outsourcing the the In bookings remains addition strong of even we new to positive strong results, quarter opportunity and another deal

quarter organization. which and continues four pipeline to record million, new trailing over Our wins for our $XXX a grow is are our

machining diagnostic the mobile were key insulin we program quarter. for few and electronics, for night like military Medical vision satellite a optical manufacturing instrument pumps, advanced wins In A&D new we awarded precision applications, in application. RF the to programs highlight sector, In device. a were sector, a MRI infusion awarded for the for control a bacterial new manufacturing I'd Now, programs a and

industrials, wanted two expand In to A&D the are sector. capabilities further our highlight We machining customer to world-class case into I excited study.

sensors The robotics first full leading applications. used our Industrial are meet and is in capacity with boards high-resolution printed certifications LiDAR provider circuit completion are for volume Thailand Ouster. automotive complex XXXX, now digital assemblies Infrastructure, automation, optics production. customer Ouster, smart our In providing a facility, of of we scaling and we After to microelectronics, in

market Our and fulfilling outstanding demands of the in rigorous Ouster forward to to programs these quality job team meeting an volume we in coming done has support requirements bring look the years. to

new systems hydrothermal manufacturing awarded design services for The projects. monitoring, broadband our America seismic and products. product for services Technology, utilizes computing the the selected of for Inc., GTI's Benchmark to for and measuring nearshoring to second new computing for hyperscale were next which with assist quality to North be In Geophysical extraction, manufacturing and excited We're strong subsurface based for reliability manufacturing was reputation customer various product. the resource earthquake telco, generation partner. and is our new and we construction on a

our new to we pipeline Our remains year-over-year. all grow and across bookings strong sectors business of expect

Now, I the to to results. the over discuss you. turn quarter will financial Roop, Roop call first over to

Roop Lakkaraju

you, of Thank Benchmark for Please above $XXX slightly in our was was turn midpoint QX, guidance. Jeff, the Slide good our Total by to revenue revenue market which afternoon. and X million sector.

up were and lower in continued increases involved decreased Semi-Cap cardio elective devices. and A&D demand for offset revenues care in Medical to and softer sequentially from first expected, telecom. revenues - by from COVID therapies relatively were products quarter related primarily other for demand flat partially As surgery the

from wafer boost first an expect continuing up comment revenues second year-over-year XX% fab strength demand new up from Semi-Cap the later, will half continued greater quarter As the chip Jeff our XX% who support customers were do and capacity from are programs. in output. to uptick equipment in we to

from no future. demand deterioration commercial in non-electronic reminder, a and revenues of from precision our demand the quarter primarily customers sequentially to assembly customers. near in A&D first with As for electromechanical machining recovery XX% these provide we aerospace the decreased further signs

delays. revenues were continued from approximately reminder, flat markets building customers new aerospace was softness market, Industrial revenue. our softness and in transportation, the traditional satellite ramp XXXX XX% in Revenue our the products telco and to oil A&D down programs. quarter-over-quarter. primarily a revenue. commercial sector was quarter represented sectors, slightly and XX% by first of from gas, our for first program Revenues increases and continued Overall, higher value infrastructure, offset computing in were testing revenues for As quarter commercial

XX% Our represented first revenues. quarter traditional markets of

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

to Turning slide seven.

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

in other restructuring and of totaling and $X.X activities costs included restructuring one-time to our million network $X.X around GAAP results Our other reductions insurance sites, recovery. million of related force

QX, result 'XX points our XX points X.X%. we absorption, higher as For and medical lower basis, variable midpoint the basis non-GAAP our compensation. a our and QX revenue, This was value market than reduced sequential basis XXX less a year-over-year gross by basis our which higher XX of guidance than discrete were had On points comparison, margin of is lower mix. claims stronger, better activity higher

margin In non-GAAP between for rate than quarter, our EPS decrease due profits of of was was US $X.XX costs. higher is the jurisdictions. Our SG&A Non-GAAP which was a operating ROIC XXXX, effective guidance the $X.XX X.X%. $X.X variable midpoint X.X%. mix our the lower XX.X% and the and of foreign a to was Non-GAAP tax $XX.X QX million, result million as sequentially compensation was non-GAAP of QX

eight performance. our slide to cash Turning review to conversion cycle

within cash collections in inventory quarter, days the to improvement X and the first shipments customers quarter. from were the an cycle of days Our fourth conversion XX receipts, of the quarter from timing

Turning to slide on for capital an and liquidity nine update resources.

XX March $XXX $XXX Our million at cash balance the was US. available in with million

cash QX future $XX cycle even in grew ramps. our We generated in sequentially, Our million $XXX term At cash cash XX, in while operations our on flow strong from for million cash loan performance with was outstanding have free because borrowings our $XX we invested our flow inventory million available balances $X no had of conversion outstanding and we revolver. March million. on

QX, capital to repurchase slide and dividends review paid used our of $XX.X $X.X shares. cash allocation XXX,XXX XX activity. to In we to million Turning million

while $XXX had our authorization. in QX, XXXX quarter to million slide our XX, share we opportunistically of turn XX March existing expect second a market Please of we As shares guidance. considering for remaining In to review repurchase approximately repurchase conditions.

revenue million midpoint to the $XXX a at million, from range represents expect which $XXX to X% We year-over-year improvement.

costs. of the year We X.X% increase We to guidance X.X% purposes. expect our X.X% impact $XX a absorption. for to still of our SG&A that gross expected at revenues provided estimated Implied and modeling improved intangible expect non-GAAP range will gross higher for in and full be margins to in million will margin The sequential the guidance amortization least other for range X.X% between and QX is is restructuring The due be assets margins operating exclude gross X%. $XX and million. does to margins and

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

the Our diluted $XX year a support for working year. million Semi-Cap per the inventory execution from be our bookings, we $XX capital XXXX. related between million. in debt. earnings of growth This $XXX which our new to fiscal in Based ramps expense $X.XX to sector, of will share is to for approximately we be are and continued be for flow the of generate plans year that Other midpoint expenses new cash our We in increased net to customers expected operations interest expected to the range million growth $X.X contemplates on of for primarily to $X.XX strength to CapEx is estimate to million, the through million non-GAAP $X.XX. increasing of program our range $XX outstanding is investments

rate network. for weighted XX% effective because are expected of tax for of around between XX%, that income our QX our shares distribution XX.X QX million. the expect global be non-GAAP We average and The will

the Before components Jeff, on to on back play. perspective wanted comment call I our turn to I over

extending which environment aware, strength for Lead the macroeconomic are as has supply. on allocation, electronic As in are outpaced going you component the components times overall primarily recovery, is are demand semiconductors. more gaining

quarter Jeff. And, to changes and to suppliers constraints existing to us increases. the cases, give we significant re-plan end sourcing. I'll actions secure that In also to no actively to into revenue COVID. to in minimize close back guidance we and with assumes disruptions mix maintaining We will conditions supply assumes and is further some our customer alignment confidence material all to working turn XXXX. customers. redesign customers or call alternate These and you, due demand are interruptions some That grow orders summary, our distributors are over component to working that, base, no known to market In with operations enable takes to our with products for will supply consideration support the

Jeff Benck

that for update. Roop, Thanks,

by sector on some quarter the XXXX. additional Following Roop's on to XX. view remainder second demand of comments for slide provide on our I wanted of is color our This guidance,

competitiveness. the supply revenue quarter QX, chain for products. are led growth the greater driven Semi-Cap, fab outlook of sector demand upward QX about over sequential up severe government to in sector semiconductors transformation QX XXXX to and address demand strengthening revising programs, this this security which and A&D, is growth years This this to and but current for second in potential of fueling continues strength due positioned expected continues leaders quarter, our by our build is we industry and we With is over radar shortages, has the by security XX% continue not demand customers, to than $XX from also for strong current this growth to million. wafer even we about remain defense cycle semiconductor the though only to investment and in equipment The results. outlook sector. Semi-Cap, several due for to the overall increased strength revenue for capital demand growth, XX% concerns about this pace XXXX, A&D is equipment commercial second accelerating XX% related and levels. growth Computing. with signals the was In for in in deteriorate. digital demand from In For in demand by well believe communications, expect be sequentially our semiconductor expected the a by growth led aerospace the We Growth to

the through will sector the sector, still XXXX. medical As elective expecting projects in to yet flat from QX sector, remain the high-performance expected In growth expect XXXX computing first and revenue are strong computing with ramp products pre-pandemic in expect for we demand A&D such, for starting surgery returned have second in In XXXX. not the flat be to cardiac-related half revenue continuing we as half relatively levels. we and

from indications ramp half point coupled new in growth this, program in is number sector starting early of stronger to the customers We a elective and are receiving our year. some medical QX, strengthening that surgery of demand this with second

broadband XXXX will the our we through telco from selective gas medical transportation proving yet to overall we've demand our second stable In XXXX highly another growth oil infrastructure QX building product recovery In and expect half and it and the We sector. customers. our in year see demand where for growth. and in in be is engagements, significant is industrials, market, remain infrastructure

industrials new We are number these experiencing such, programs delays. industrial the and Many of technologically the flat some excited program programs believe Based in program a advanced designs about now will and, new we year. are of tremendous ramps we space. be for as these dynamics, are on

ESG our technical requirements of performance sustainability wanted slide further Council The first successfully has SASB industry against Since performance to XX, be within as worked efforts. continued highlights we updates found to ESG objective five our framework. and ODM key document Factsheet, our for provide can transparency our the of framework call, of on to enhance ESG on is current releasing Sustainability our turn deliver EMS the Factsheet to SASB our further this page If you which the within This our tenet. website. provide February the the the and I

expect decision-making in of on Proxy. report, leaders people class Annual have innovation. regardless race, diversity better greater or SASB fosters the recent gender, the all increased inclusion provided Beyond our our we embrace Benchmark, to and and further most Recognizing we also value updates and progress At Report creed. both our

a and recruiting actions strengthening planned We inclusion through equity revitalized set around a diversity our are through programs policies strategy. of training, and

a to engaged goals. have perception act and listen, a we our who how DVI we is framework such, establish leading study As for consultant a learn achieve to

ethics trusted their assessment a broad to environmental Silver systems, us the labor sustainability proud range have business EcoVadis world's been sustainable of from ratings This top covers very of recognition including Medal of companies providers XXXX procurement. one our and rights, the XX% a rated. progress. are human and most is We sustainability non-financial of management recognition awarded in puts in EcoVadis and of

both quantitative Initiative, collection align Looking ahead, to Reporting we GRI, Global started and reporting data qualitative have the or the to standards.

strategies. our our the are sector revenue at and aligned initiatives progress entire through go-to-market a supply customers bookings accounts want and priority innovative other existing strategic committed as Sustainability, organization the look we slide strategic tremendous continue XX. announced partner team, with our by Benchmark with Materials Applied ESG As led chain both is previously, wrap of new our journey. at part we Benchmark Growing are for the targeted see up and of to have a towards of Benchmark summary XXXX we top momentum customers three providing our and products and call forward I today electronic I further ecosystem. There to we now surrounding to continuing strong the new is to with updates the as with efforts on

XX% helping component. of solution, accelerate engagements their versa. We of the focused more on is wins in which vice services. design and in about To have manufacturing to our and increased to point, both are market, time rate QX, engineering an our wins in provide - very This includes that customers reflected new providing our attach manufacturing engineering of complete

over that computing gives greater us Semi-Cap new offerings now achieve year. growth confidence Our This in have in X% in high talent, the XX% and in significant strength, and can mid-XXXX additional support our will we vertical, to differentiated In and higher Semi-Cap ramps coupled program sustainable XXXX. in than invest long-term new growth value needed we wins business. in long-term also our our must order with the expect the programs performance market growth which this program and enabled support in support to scale and we markets, infrastructure new grow objectives,

investing ESG earlier, as and are and processes our underpin tools, and diversity foundational this in to inclusion imperative. only discussed they are and investment initiatives areas drive also operational manufacturing I advancing effectiveness. As further we But of sustainability assets not

in efficient are As invest to to also in Even contemplating referenced an serve or driving shared advances SG&A we committed revenue. continue our Roop our business, management customers, how organization and of to continuing below services technology, we our strategy, earlier. capital maintain on including X% at to best expense as are we our focus incremental investments aligned spend to evaluate exploring though our we

Finally, we revenue. expect faster to grow earnings than

demand utilization growth fixed we gross to growth still revenue X% is model year. With that and from new Our leverage achieve the our better margin to increasing for on full enables higher ramps, expect costs. revenue predicated

Given support start. July. look million for of are still customers, the In between further forecasting suppliers good I excited Operator? I growth inventory expect the Q&A. my to All current strategic progress continued conduct to I on XXXX remain capabilities securing and valuable buybacks thanks we to to call employees the but flows a updates energized from support the component turn our that, support. the all, developing operator making supply and shareholders, our capital over cash their efficient are to is to relationships. chain our plan and dividend. in year express and million. operations environment, in continue customer our hard-working And, I'll our value off our we forward in we in for the and for providing incredible with want our our about call of we supply returning recurring do use full and $XXX to of and to $XX

Operator

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

Jaeson Schmidt

facilities. had that impact the start comments my I revenue you quantify questions. the to on of the want in with your shutdown Thanks Malaysian for QX? Could taking just

Jeff Benck

the COVID in Yes. We a XX did in We really But quite recovering did Jaeson. amazing - days two quarter. job from a did the working halting really for operations weekends enough that impact overtime, facilities in we team job, amazing and about have an there. our up ended team, significant by of the

So, de got last - the when I stand testament really the working nice they really and to not shutdown fully did not recovering. really a say, the really somewhat they operational it that something would that mean, was a from out of of the weeks job minimis. just would three a back I team, two, was quarter impact and

Jaeson Schmidt

And Okay. bookings New QX a of as Chinese different know remains follow-up, a That's fluid, just I then the always and discuss and bit trended in QX? bit helpful. how macro patterns order a is because you obviously just could but Year

Jeff Benck

line We but I quarters, talked we different a all and seen that you all, year. more all about We than fulfill pretty I supply, talk QX a little bit the think to quarter in are we consistent. because, prior first in can But, order to always of weren't different don't in and be I I the think some start we played there it load we've it certainly indications able in But all demand, commentary in looks think out talk in come see that pretty as mean, the necessarily in quarter, have the as I start given in stronger some with experience that not was in quarter. said, our think we that. some in of things tightness expectations. demand that not half was have customers did seasonality, the that what of half. second to seen ton things increase a progressed, as about than are new we We like

Operator

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

Anja Soderstrom

you and thank question. for Roop and taking Jeff Lisa, and Hi, my

limitations supply for a there said within you could just demand of in little bit chain way a puts do challenges that the there the upside quarter? you quarters? can navigate visibility the rest the if you So of kind the on you the also on bit little any have, what you quarter, is of elaborate And the coming it have

Roop Lakkaraju

start with this Yes. is a comments. Roop. maybe of I'll couple Anja,

we to the really across the a navigate mean that the said, ability have we're not you at to might with With we commodities, mitigating providing said, And demand to guiding the it? push half it's at we the in means will navigate partnering that which in but If $XX customers strength semiconductors some about possibility and hard to and could supply up, think $XX to that right but constrained working of be obviously strong demand your potentially, we have million tells of subsectors. strong, with That's that it's That just lost through see. our our it think, first, sequentially think could the cuts second a I demand the a all be execute the demand, environment. that how and teams mind, chain that I fulfilled last we of can it tune that's is market. unfulfilled us question continuity QX, we demand. with million in it. look they believe. associated I it but environment of across not risks With I are when It's supply, we 'XX most quarter? our and

Jeff Benck

that's guidance, add potential right. up just talks to he might and demand, commentary, for Roop's further about our unfulfilled to that, the above when I

not what But forecast that's is it as putting necessarily a environment. factored in we're So risk to and out a that's tough a here. not

demand recovery then the You've got we've economic constraints. at but time got the continues, component increased as same the

with supply get to you closely to we can say, very who the that, plan we working our customers we're working for needed it, to ensure that. see be to So guys together do as need closely that

right. our on near think our to which When sensitive, this So component participate segments as lot, not a stronger planned, and Semi-Cap about fortunate look we be than you that up is we we business, are are for in year not some components. as dependent that that

semiconductors. that partners In industry fact, our if equipment anything help we're build ultimately helping the customer more will produce the with capital

area, for as is of near example, immune vigilant But not industry supply issue actually it's But the got to an navigating and but whole that's the we're think we're certainly sensitive that's dealing a that part we we've and it. in So done - components. it, an on job stay not good with to of we've tightening we're not solution. to

Anja Soderstrom

Okay.

for of since But accounted the is solution, you any hopefully, visibility risk will and So, supply right? for in prioritized guidance, the your components. though need line the of you're There guidance? terms to no just case for, there in be It's part the in in that is the is quarter upside?

Roop Lakkaraju

potential of us from as our though. And close in all lot is Yes. to That's suppliers. demand what I But likely environment, than a takes we're because strong growing was more shifting. have It's stronger reason look keeping not trying to to to we to to to lead-time could that reiterate. will that - of It able our just be guidance we're what grow but drive we're could ultimately fact comes able within sharing a of business, some up you to We revenue. done sight - our demand normal our line was that of barring account do work We like that the sharing suppliers, we we the and supply - the we even actually resolve that anything fact unexpectedly. that into have align to close, as We're did there. very with it's that's we'd of more it. obviously still

ability want - have demand sell. the any to our fulfill course, and customers we to Of the

Anja Soderstrom

of And the medical terms trending? end markets, you you back, the additional elective is talked there do information. that Thank for see you that in - how about coming Okay.

Jeff Benck

the Well, we - what others too. said of kind watched we've space in have

seen have that. We

growth and of had been first do up. but kind demand of surgery has year, signals we the lot picking see half, of medical, elective Our we flatter in a the last

influenced green we're see much We that products. starting in us as full growth as that you yet to uptake the also of signs, as of we're and in quarter to in the in continue seeing some - at in just look in - would not it's is of like are that also, show half pointing really as bit year, that, diagnostic four see participate to are demand. the beyond. look some kind should business, - signals we Those of quarter, second we in that terms from most ramping And I there our nice forecast half second probably we quite but in say, early is quarter to growth for a to products products medical quarter cardiac third quarter, first looks which by look leading new second strong and half. quite to the some in and that second that And, have further demand it's third and ramp also not

of in, the medical some wins kick new the XX for really So are to months had over but more starting us. second that's we last of a half of that

about now. think we how medical of, kind that's, right So

Anja Soderstrom

you increased year, the And mentioned the right? for think I CapEx you guidance that you. Thank Okay.

Roop Lakkaraju

it million. million did, $XX moved We to $XX Anja. We to up

Anja Soderstrom

Is machineries any is driving this And just what's that? there or? expansion or further

Roop Lakkaraju

of we've It really that, improve had in QX we the strength Semi-Cap strength is top strengthening about of the talked bookings and ramps. then revenue the in the QX. to support that environment and in continuing on the bookings And and over

of in the Just that see in demand the support Semi-Cap additional we out putting in capacity the quarters.

Jeff Benck

is interesting, Semi-Cap Anja…

Anja Soderstrom

Okay.

Jeff Benck

is Semi-Cap XX%. now we growth, X% saw quarter started the that adjusting said fall-time, then XX% interesting in 'XX, we're X%, we in we because last growth to

to we've very So be clearly is strong and gone Semi-Cap strengthening forward. continuing as

Anja Soderstrom

margins? average the be bit sort or computing your should Yes. of and but a going margin part is at markets, given about of, margin gross think affect how company that And, to traditional also, the stronger your, to the that's is is gross right, going we that still

Roop Lakkaraju

Yes.

is we margin. gross expect that we of thing our X% full the think are portfolio I to mix us is, be to to always is at there mentioned terms revenue. reiterate it year, important in of - One comments the

let's that is sequential what in means offset, say. can you improvement be mix it will so Semi-Cap, - lower which comparison a gross really gross is, compute and expect margins So the as for dependent in the will mix margins,

will, execute continue see that that out average the we growth But, margins through we the expect a two, certain gross spoke out X% you we you and between overall, at So revenue of as extent. year to kind the year to if balancing of, to the for to least. around with

Anja Soderstrom

question, areas then oil The air great. -- were last and more challenging commercial just what gas And and you the Okay, and if don't mind. the industrials, one

Jeff Benck

Yes.

Anja Soderstrom

What expect there? do the What is -- you

Jeff Benck

We're some like we're And see manufacturers' we I'd aerospace the yet. is people saying say know aircraft announcements of going don't we recover, 'XX. but to not commercial aerospace, starting are to we're for again. to fly watching Obviously, anticipating it and that.

So is right international seeing travel it's also improvement now, we but pretty we're in an aerospace. not low, so like - non-existent know

is we wrap quarter defense, XX% a for know, up down we've this frankly defense so, it's of of and that's softened, in aerospace got little even we our year you now it's you of if the pre-COVID, - were it actually and A&D aerospace about hurting the we're commercial year. business holding being XQ. around bit driving very segment As in growth Because because well, last aerospace, so But strong March full down us. still and has sequential are remember now but XX% was XX:XX, XX% year,

sort back. believe we to have we as recovery will that segment of - kind us that's industrial, second the at we point. back-end an year that's seen We get segment. come area in oil On yes, the of that the in this gas, a and that So where of half helping again, not

projected, right, of ramps a taken to any and of have because programs ready customers not in go we it's completely us. hasn't - just product had with other to those own, number pretty that longer to areas volume the we some bit of and new Our would were but little that the business manufacturing. thoughts designed technology it shift did for fully a on year than industrial is also our have believe is diversified, what of say are this like very that to complex due some and flatter space the industrial infrastructure to some still We frankly segment our that be that we really there initially recovered moved new get fault might because

thought our industrial, saying likely So but had in now growth be see we're 'XX about in still more feel might flatter. of we the sort to we it's good position

Anja Soderstrom

question. potential package the administration's last infrastructure, about there? being from the do We One how Sorry. new talked new impacted yourself

Jeff Benck

world. typically we of office, keep budget defense modernization, were question in happen challenges so we they what see Well, regardless to the continued like support have about believe competitive absolutely work we will the the defense, there, see to you I where and got of get that we think, the military on going our military we

to we as area. In Metro encouraged maybe - the Phoenix, very terms both direct Semi-Cap related foundries and here as and Biden's roads the in much right. We're equipment are they would segment. that here Phoenix TSMC Phoenix, comes the don't is that it dollar - of and additional the investment in an us, headquartered, as this really big that highways, in of where But semi-capital, multi-billion impact we close participate not foundries. package said infrastructure, home about And to in not open Intel we're

segment. a that capital we equipment number in players So fact of the that support

than semiconductor heavy As a the the growth little is to the we cycle bit sophisticated build. because do to investment requires and think three-year of build that a story why US talked the develop in be typical going help we're maybe complex secular two, the foundries those we to probably may longer that remarks production we for that and equipment to more say incentivize domestic

good could very think and that us XXXX be So for we that beyond. into

Operator

question Please follow-up next Street. of a is Schmidt go Jaeson Our Lake from ahead.

Jaeson Schmidt

quick two questions. follow-up Just

Semi-Cap call customers it, expect updated by of this based that a guidance, of is a on driven let's sort in customers now revenue number of you million few incremental, being the sort programs? specific different or concentrated the $XX the or it market, On is in

Jeff Benck

couple all customers, customers a space, of of It's the but Semi-Cap Semi-Cap. it's in large not couple

large We customer the ramp on. That computing also strength working there. in the see some happens be a starting platforms of we're high-performance in to large

saw some of which of defense sort up is the some multiple and also there, customers. projects We sequentially

customer. is and equipment us number second quarter concentrated one more up for really Semi-Cap players. of So just than based - broader Semi-Cap. large But though it's is it's not on a fairly the capital

Semi-Cap That's you I driven. to that. So with leave want all

Jaeson Schmidt

of engineering the number to for you'd really manufacturing to that's range And is rate of, that maintain target? that No, sort that or going Okay. early seems like just then, attach the XX% what, helpful. services lastly, forward Is sort impressive. long-term

Jeff Benck

great we've question. great because a about a question, That's It's that. talked a lot

have year. sort the last and said been have that of, engineering always, services below We opportunities we to we least want at of somewhat half involve

to happen. be as be published ups and we bookings every would but that There haven't downs quarter, at will it like some level. We

the wins up. Sometimes not the they of times develop the we some to manufacturing engineering. then thing on can all, Many we're being the leading that, on hey, to help don't as so win line working other the with asked always and firms manufacturing ultimately now and product we it. is engineering going But build and it's

suite we want We that a it bit a services every richer and really why both looking it engineering be world. to that's quarter EMS we're more. we tracking see sell directions, going know We closely definitely attach we are higher because called probably engineering specifically we to we but the of are rate, out, services. do margin than at we getting can tends So this little to because know as

a it's thing like to margin, and build yes, forward. helps with of to that us going gross but, for would that XX% continue on us north So be the we and good

Operator

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

Lisa Weeks

joining for our again, you, today. call Thank

- our Insight our a Thank afternoon. Stifel quarter wanted June don't forward you Cross in a Media forward you to these put look results earnings that, questions engaging second Benchmark Conference our the and up. with good We sharing Needham earnings and to release, you Virtual quick follow and XXth May I the reminder hesitate be regarding to be Tech have supporting If please happy will that to also any on reach follow-up I'll out with on please We call. to you. July Sector look in Xth. Conference you events. With at have

Operator

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

Benchmark Electronics (BHE) 29 Apr 212021 Q1 Earnings call transcript