BHE - Earnings call transcript Q4 2021 | Benchmark Electronics, Inc.

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Operator

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

Lisa Weeks

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

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

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

on financial rooms of objective including a a the detailed and with our begin our Jeff for by discuss XXXX market full sheet strategic new quarter our For will balance cash and financial by of XXXX update initiatives progress. guidance. we today's call, recap sector up model a with the will and year call XXXX conclude results, covering our a our then Q&A. summary summary results, quarter the for progress and first and fourth Roop wrap will year Jeff program an outlook before

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

Jeffrey Benck

Good strategy. the to and the full the everyone strong of by revenue fourth sectors. and of margins range and supply execution for our year. in across for you've fourth Lisa. non-GAAP which long-term driven the COVID progress on fronts seen revenue, higher and and in Hopefully, was call midpoint press was utilization of operating results and afternoon, With by X.X%. better up revenue the high and of exceeded We've you, quarter today. the gross chain our and Thank we our million thanks our XX% and for delivered industrial many network, achieved disruptions, made joining We achieved the release year-over-year, of great EPS Even Semi-Cap, X.X% right which guidance quarter. $XX in and above margins ongoing revenue both sector our tremendous computing guidance of mix delivered million, $XXX our end support demand we challenges intermittent with our now, we

were was up and earnings per approximately As also delivered of expenses, We of a last the guidance include year. our non-GAAP XX% compensation points XX% sequentially the and which fourth end our margins quarter high reminder, above stock-based in quarter. the operating which basis of fourth share from XX $X.XX,

improvement days an our of days, XX were X levels from prepayment QX support higher results cycle despite over we received conversion inventory as cash Our increased customers.

the unfulfilled third chain to quarter, In were that fulfill $XXX in the additional of backdrop we of the a with constrained to challenges. requested behalf which demand supply achieved unable driven million were over chain increasing expenses by again, demand costs our inefficiencies, supply last results by we've similar these quarter. previously, experienced estimated labor absorbing mentioned of we environment. As ongoing and been we on Furthermore, our the customers, customers, is quarter

strive this these quarter constrained to a team, of our the chain balance, the tremendous were While customers. experienced, of good some amount given operations our costs of we've upside. the to for overhead fulfill being prolonged always backlog enabling increased Thanks on our efforts fourth meaningful we diligent length of and passed we to are environment, able supply

continuing to increase. However, is demand

corresponding we the to constrained large and our a demand new broad was market supply while orders demand elevated. has in amount came quarter, keep see of Unfortunately, chain in don't the this filled served So backlog levels and in in recovery XXXX.

supply are X. results. teams and the of ongoing turn deliveries inconsistent great Please Despite to with QX our are delivered replanning and operations job challenges components through do inefficiencies operation a supply doing managing still throughput arrive. on we maximizing when Slide based by chain the COVID, strong in caused really Our disruption

growth to beyond. are will programs Their closely consistent our stronger, continues our working that revenue and company XXXX key bookings. we I million for growth. of future our years operations bookings to internal sustainable achieved organization ago, go-to-market X performance These our of number to driving new our even to that set in and while we consistently an achieving bookings over secure in the greater and XXXX where the was with quarter. over of million $XXX new I'm across ramp share existing 'XX new in contributed accounts and year. sectors. teams has to in XXXX, we a bookings targeted new million team goal In almost our ability in joined in per with than ingredients and proud new accomplished contribute $XXX for the wins growth large accomplished Our new bringing $XXX engineering customers When

tools. proud customer, the complex instrument industry, we're processing we we excited space Let and in robotic in handling and into continue a most electromechanical Semi-Cap, production. represents tools to was our awarded semi awarded equipment selected We on diagnostic for this the manufacturing projects point-of-care of a In system, In some an QX. build be surgical the new The the by wafer complex system. of wins design continue also we of the through cell win in awards capabilities. and expertise which few visualization of a the for A&D design of to new programs a support Benchmark announced of cap in will manufacturing where advanced to an next-generation therapy for the state-of-the-art our and were engineering system me program of We highlight extension innovate. a manufacturing was awarded deep medical, new and exciting them signal new of were our systems their our sector, of depth customer. Enos robotic Titan our we capabilities. to to system Medical, We're design medical partner were design Medical. the investments and be Titan manufacture and scale differentiation and continued helping team, development based customers' RF our RF processing experience this in a In awarded on for were

existing emissions. these program In satellite a is defense communication capability new with an to operations manufacturing also new We broadband program outsourcing industrials, automation a with with were mobile help as avoidance reducing In We our faster. leading-edge also for aligned closely drone collision products a were the them for This the waste the devices connected and new while a electronics manage award of were way sustainable industrial we for sustainability and awarded new for in applications. new program COX is and telco, first-time customer commitment manufacturing design at awarded warehouse manufacturing targeted programs customer a objective for customer. manufacture we a a recycling. a to of with to smart systems scale computing awarded won and

Our continued help encouraged are targeted partners grow new to on projects pipeline business for and very them market both strategic can wins, OEMs faster. outsourcing more remain get prospects we to across and about looking manufacturing and to where scale for that take engineering the continued sectors our

shared to into year outlined focus that turn midterm please and initiatives progress overdelivered our achieving I'm happy our good you the all report X. as a to results. subsequently were and ago, going and to objectives our X year on XXXX key with X. year areas model, characterize we If would One critical then where I we strategic Slide

in First, strategy investment subsequently customers. XX% industry-leading we for verticals us where semiconductor said value making growth have year. we are last of is we the for the incremental we grew with this which investing capital proposition a the strong differentiated would example in grow We've revenue. of in action positions industry, been strategic A support and great

growth. to to bookings also production Benchmark from differentiator installed highly then these have base While our complex doing attach off, new accelerate new our the further and bring a in revenue logos engineering global begun so projects. partner we our and believe on a win engineering right are basis, rate deals. customer are high will manufacturing We new with programs program a of volume for we to is investments capabilities to execute pay

successful in greater team have that to These enabled regard operational growth rate set our our this for along year XX% fact, than from EMS activities, the another XXXX. year annual stage last In so the XX% has in and attach increasing growth goal to for been execution engineering we're wins of XX% with XXXX.

infrastructure we'd talent. and that sustainable Second, we said invest in

services shared on provide we've in will cybersecurity sustainability as year, and We're update. third, can managing our progress And while Over resource with continued journey which sustainability additional and detail effectively such growth. our said development parallel, continued would update ensure our also systems, we make grow as investing our manufacturing, and after we on SG&A we our in I scale initiatives, an report. human expenses. our in earnings to than investments upcoming revenue. add financial to In meaningful capabilities customers the faster we've engineering ESG that Roop's by made requested employee shared infrastructure past to also will

the year. call performance additional and year full sector XXXX. program This and execute for new way leverage XXXX and per XXXX XX% demand I'm share I will bookings that, confident continue our on year of to results, back that new over our to fourth to the leverage, provide I'll business. wrapped this discuss the excellence, our X.X% gross our with I in against strong intense of ramp focus of some turn costs with of by plan new proud the and with am non-GAAP we objectives year-over-year. earnings before growth quarter strategic our color Roop and Our on coupled XXXX, enables key in financial backlog fixed outlook for come the enabled revenue operational And achievement up to better margins momentum, we and

Roop Lakkaraju

$XXX continued was million Please Thank revenue XX% QX, year-over-year our care up the you, was turn year-over-year. good by revenues higher which X% for sequentially and market is in XX% Jeff, revenue than improving and and X expected Medical cardiac were Slide from and Total the sector. sequentially respiratory higher in XX% quarter demand markets. afternoon. to higher which for fourth Benchmark

from machining improved future of computing large and XX% fab levels XX% planned, our which improving sequentially will medical yet from XXXX. for decreased revenues primarily high-performance related new As sector, building the recover first the aerospace quarter sequentially demand second and and traditional XXXX. In XX% applications. for new half Demand up from markets electromechanical Overall, year-over-year -- sector transitions higher continue XX% markets, remain for commercial and quarter XXXX demand lower and In from and programs ramps. satellite wafer our telco our robust and from revenues pre-pandemic over are equipment. programs value programs, in that year-over-year. Semi-Cap have and was to our assembly services, which XX% were levels. infrastructure precision which represented revenues complex revenue. year-over-year sequentially were Industrial the continue from year-over-year and primarily XX% X% backlog programs we in broadband oil the improvements our half is throughout revenues for our year-over-year, will ramp levels revenues and sequentially high, up LiDAR planned demand, sequentially and front-end the up program fourth XX% to which were X% up improvement XX% quarter computing gas, fourth XX% to and of demand fourth A&D

quarter Our XX% fourth of traditional markets represented revenues.

sales of fourth X. customers the quarter. turn XX top represented to Please Our Slide XX% in

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

various to results our onetime GAAP restructuring Our restructuring totaling related business and to aligned other focus. costs included future million global throughout activities $X.X network,

revenue environment. by revenue, For supply gross On the higher we fourth midpoint revenue, better is QX, XX our our and driven were was current points better from absorption This of basis even non-GAAP improved facilities. sequential points utilization up XX mix from a margin component better higher than X.X%. of guidance, basis global chain inefficiencies quarter our a basis, across the with

was was Non-GAAP is was higher Benchmark from the In pleased growth revenue full midpoint QX comparison. growth sectors. QX effective mix Please due of expansion. and our margin the telco tax margin. point increase market Industrial, U.S. $XX.X to which gross was $X.XX the of revenue Non-GAAP to and which revenue million higher compensation. X.X%, year-over-year Our point X.X%, XXXX see was $X.XX the operating our on the XX.X% profits EPS an points by basis quarter, revenue basis XXX sector primarily SG&A XX XXXX based was stock-based X basis XX million, Slide the than billion, Total both versus compensation. in improvement for the year improvement based sequential included up higher Computing $XXX ROIC of market sequentially sectors. We of Non-GAAP foreign for $X.XX $X.XX between higher Semi-Cap, which strength an of profit and value sequentially and XXXX, on guidance traditional to jurisdictions. for for the and was because in XX% year-over-year and rate XXXX our non-GAAP turn a were of increase variable

and revenues revenues. in continued space, new where did year-over-year Overall, equipment higher-value strength X% commercial programs from slower impact revenues and the differentiated Higher supply and we our Semi-Cap for which the up the services. capital year-over-year, engineering X% products electronics XXXX levels of lower declined in primarily infrastructure XX% transportation by the the and weakness gas, from first For from Industrial base not of manufacturing Industrials, and demand and and and from XX% markets sector led precision constraints, design, front-end year, half A&D full provide up offset across in were the commercial new respectively, from year-over-year. the were from improvements customer machining XX% increased XX%, Semi-Cap semiconductor demand demand revenue ramp which oil building was persistent limited Medical existing decreased programs. medical demand XXXX. surgery programs, by Overall defense growth aerospace. increased elective

revenues. and up sector markets both traditional higher to of that value ability in in all from XXXX continued from limit in our our to XX% half, and revenues were represented programs. XX% broadband component XX% of the XX% revenue, was medical second were execution from continue high-performance improved is availability While demand from XXXX. throughout continued XXXX. markets Computing desired up X% Revenues which program the traditional Telco the and portfolio fulfill up strength ramps computing with our the higher will XXXX demand and new year-over-year, customers. traditional XX% our programs year-over-year markets XX% planned Overall, of consistent ramp and represented target primarily value

for full revenue than Applied had year. customer, full XXXX. customers year greater was for XX% Materials, that XX% X Our sales of We the top XX of the represented

If XX. you will, please Slide turn to

per year Our share was XXXX GAAP fiscal $X.XX. earnings for

GAAP restructuring activities network. Our $X.X in consolidation other costs onetime activities primarily results restructuring other totaling and to related our million, type efforts, and included reduction approximately around force site

our of exceeded a gross XXXX This XXXX. goal X.X%, full increase. sequential XX gross point was Our non-GAAP margin basis margin for the year X% of

levels cash EPS was days improved margins from XX the and XX conversion ROIC review grew in infrastructure $X.XX operating XXXX our ROIC Our increase Both in basis gross non-GAAP revenue Please rate from increase were non-GAAP in XX.X%. an SG&A for efficiencies. in was margin to compensation, continued non-GAAP Non-GAAP turn non-GAAP In expenses Cash to increase XXX performance. $XX.X metrics effective quarter XXXX XXXX fourth X.X%. was XXXX million, grew cycle year Slide improved primarily of was QX. XX to higher higher for X%, and non-GAAP days X.X% an EPS to from cycle XX% from investments. and XXXX, XXXX. over due operational tax our compared ongoing IT Non-GAAP is $XXX.X was variable substantially and the conversion points. Medical million The as

update Slide liquidity an on capital to resources. XX Turning and for

During and our to for in $X invest to the operations fourth We cash invested free inventory quarter. $XX million $XX support we which cash used in of quarter, flow usage continued in CapEx, customers. the of million million resulted in

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

cash sequentially. inventory Our million revenue in decreased investment growth. primarily The to $XX cash decrease balances support is in

revolver of zero $XXX positive borrowings we of million our million. and on loan, outstanding outstanding our is $XXX net had our XX, As against a December cash debt term

continue Our available growing allow strong customer liquidity cash profile. revenue support our to balances and and us demand to

we expenditures we'll Turning had to $XX capital the review capital We XX million this in expenditures. into which our $XX in beyond roll In XXXX, Slide allocation activity. to authorized spent, year. million invested additional 'XX

such, spending be $XX XXXX million. million to between and $XX expect in our As we CapEx

shares since XXXX, We of have dividends a approximately which million represented paid of year, million full on flow investing growth. expect support million, not year of $XX.X reduction and revenue In as outstanding year. shares we $XX while any our did XXXX the The fourth appropriately the we million X% of was cash repurchases be QX, $XX paid we in full Since of X.X focus approximately operating in dividends generation the quarter. of to $X.X cash cash or continue outstanding total million $XX XXXX. million. fiscal inventory cash between million for shares $XX beginning in For the we to repurchase and to share

equity in share repurchase At continue to XXXX, a million to we'll shares annual had XX, existing approximately repurchase our remaining authorization. offset our minimum, we dilution. December of As $XXX

our sheet market we business. a opportunistically on XXXX remains dividends. we considering based cash invested to the and have to through and and XXXX, evaluate ability quarter share shareholders we investments in XX Since strong of through invest our conditions. will returned of Benchmark approximately return guidance. first while expect in repurchases in Please buybacks to Beyond operations our strong, Slide review our business The $XXX capital $XXX to shareholders for million almost we and our million momentum turn have balance capital that,

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

the medical increasing the expect based quarter, For we program and to first new ramps. sector demand on grow

revenue industrial to the and QX. levels strong some timing year. revenue Semi-Cap through will expect which and remain revenues sequentially near-term improve availability, from material of also be impacts down and revenues demand lower will We at Computing sequentially with telco from be down A&D consistent the volume will from

Jeff quarters remains we previous continues strong. move have outpaces to earlier, each supply. demand million into Similar demand over sector, of As $XXX environment unfulfilled the mentioned future demand quarters, of XXXX. in that And to

margins our provided that purposes. million expect SG&A We between X% non-GAAP our modeling guidance does is restructuring margin and will assets for in exclude X.X% will gross X% for of other a estimated impact and range The amortization million. costs. range QX to guidance to $XX of and Implied intangible be and operating $XX X.X% between the

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

debt. million, is be of in primarily is interest $X.X to non-GAAP expected be Our $X.XX. or expenses Other outstanding related per expected earnings to which net is midpoint our of the range diluted expense to $X.XX $X.XX to at share

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

Jeffrey Benck

Thanks, Roop, for that update.

XXXX, quarter, Roop's by of on on the color XX. sector our Slide that's on . for additional wanted provide Following I our first to for comments demand some guidance view

the and year, expect ongoing this anticipate demand upside. and seasonality compared From chain quarter limiting by strong Medical, supported with telco year. as demand Computing. we revenue constraints, sequential healthy decline to the quarter growth For space, first continued year-over-year sequentially of following last each to quarter, expect normal supply first Semi-Cap and further double-digit new We do further the remainder the throughout in recovery we and programs and revenue in Industrials growth

muted In this this in more precision and and see capital the for In tools economy. quest fact, AI forecast is XXXX well the and customers We customer nodes industry process technologies and advanced have breakthrough demand growth remain equipment semiconductor growing of our support of through we fueling in only semiconductor Semi-Cap, in smaller are solid XXXX the advanced by for sector a machining sector growth support Advances developed support need technology where digital ever positioned we to for across electronics our our design, in base. with the the communications, capabilities. in A&D. manufacturing

grow to number In our program ramps sector our have is revenues care year expect levels. for higher a confidence programs XXXX this Medical We recent over growth that by sector, imaging, demand design great underpinned Medical and With XXXX in in devices. program and large existing deep from sector. XX% XXXX complex our new be ultrasound of to in medical a and we products diagnostic for cardiac manufacturing wins, the expertise and XX% will

in year. the demand year. We applications, the ramps In Industrials, primarily smart devices. new we will further In management our fact, systems growth program infrastructure IoT-enabled another in fastest-growing customers expect LiDAR we be from legacy the energy for sector expect energy anticipate to remain and our year and sector Medical stable from advanced

to sector outlook. Moving A&D the

revenues be expect flat potentially in down to to XXXX. We

aerospace muted improvements significant year. demand with no recovery remains commercial this Our anticipated

some this and ramp offset military new sensors revenue imaging the defense for weakness programs continues advanced our with of of satellite However, navigational to antennas.

our customers defense to portfolio are aggressively new aerospace still to about strength We our add pursuing but our we're are for portfolio. return with programs to in sector excited pleased growth the the eventual of and also

growth market, broadband revenue programs the new expect For year, also expect full we the applications. from In traditional markets. satellite the we growth and in telco focused on

customer base from benefiting variety for initiative government rural is of Our packages expansion. including broadband stimulus a the

if continued high-performance expand year computing this revenue the potential from expect to for projects revenue well secure for growth These the in sector. Computing, demand component throughout another improves. with and computing contribution supply We products this support In applications. year throughout expect sector as we stronger for industrial acceleration will year as

to Let's XX. Slide now turn

Given for where the demand to our progress growing this outlook model, revenue strong and year, on we are midterm and made well margins. have revenue steady improving aligned we

we which the growth forecasted. annual revenue the growth, For full year, achieved XX% twice had we previously is rate expected

and expect we demand give that new bookings revenue program current Our achieve high growth us XXXX. single-digit confidence in to outlook can

On our of X% XXXX. at least the achieved line, in goal we gross margin

by Given focused rationalization range activities, well model. the gross the which be to track With inefficiencies teams. limited X.X%, on margins that model our chain XXXX within margins and operations site believe mix, and to supply we disruption between and that operational will in management, we excellence our execution our ongoing programs anticipate is will X.X% operations XXXX expense

at You leverage in understand power our only of business 'XX model. results have look QX revenue the to to our

targets update regularly progress on you through our we financial against as will year. We navigate XXXX achieving the our

model sharing with longer-range look also midyear. after our financial forward to will you We

continued reporting was Council first from and quantitative October Board step towards SASB turn industry Directors, XXXX enhance first the we our SASB performance Slide technical sustainability framework With in of top ESG remain fact in we began of up objective we an additional and statement with providing If QX Sustainability Force further placing an that our to for have Medal the against all the with This customers. on mapped companies and Benchmark. with of frameworks of our within you increasing in on to our we current fact section Climate-Related the achieved recognition, align an XX we established make Silver both EcoVadis further and the transparency as on percentile In the journey. published will ESG EMS, Disclosures Task operational strategic mapping released of followed Benchmark Building XX. in other spring, requirements imperatives Financial ESG of Nations SASB and Goals, and Sustainable quarter the important We initiative ESG-related expanded progress performance. our last ESG our discussion initiatives. our ODM oversight the ESG United both and qualitative and first program as the XXXX, to ESG proxy the Development and sheet. an for on global transparency sheet investors the rated for such our

area corporate we recently will launch director our you this updating as milestone inclusion our highlighted first of we inclusive while important we front, quarter, represented key governance focus forward the we an organization. To with employees. upcoming still a have group our end, today have to here launched an from work fourth ethnic us, expand and On racial initiatives provide work on an added to this area. Many this metrics culture and continuously report of of voices Benchmark be off with to sustainability a I'm of exciting in diverse our to fantastic Board the bring incorporating spring. forward more in employee in first global a these I This progress our kick all look we diverse diversity. the the our the do, stand-alone and we in our are continuing We for this board had council is to ideas to our women, privilege XX% directors and by report expanding racially DEI which to for programs employees. as to looking

our our strategy to want past very over to remains I XX, top XXXX working. strategic Fundamentally, Growing playbook for which And you years at the remains will the is revenue we perspective Slide reason, look turn Benchmark. to Finally, unchanged. if provide have built some on largely you. a that familiar several initiatives priority

component of Benchmark, our growth and teams support in must have million our in support parallel, $XXX secure We new Our in and doing longer-term that right programs rich supply with ensuring financial on existing the In infrastructure of for our great and the excess required objectives. our finding technically we we to which customers bookings set and invest are our growth is a XXXX. we objectives and sustain job are focused talent, programs. to also for target business

and capability earlier, and growth higher we than operating These demonstrated, better shared have aggressive should in growth enables have These been XXXX we I our year revenue. earnings over ability will optimism, sustainability Ultimately, margins leverage Revenue an But in be to costs. to utilization dedicated to a an an journey. the team fixed expansion, the I years achieve map with continued as to in made further model. longer-term last will forward ESG certainly this of which allow the look amount few unpredictable updated attributes our culminate The and we ultimately road incredibly past us faster tremendous progress knowing have year. has who demonstrated XXXX. results. As reflected grow expand have has past improvements to that earnings

to express support to remarks. Q&A. we to accelerate progress our the the that, progress turn continues world subside, again months. that around can momentum to concludes look will As sharing to suppliers the I it teams current my forward our challenges With I appreciation tirelessly And are our towards working prepared our who customers. grow over expect coming to and in our goals. and deep hard-working want of to supply some we

Operator

Instructions]. [Operator

Jim & Ricchiuti is Company. Our with first question Needham from

James Ricchiuti

demand, shelf a talk you you've couple of with up of to this A $XXX had like life a does couple it trying for where lot about to keep quarters? the into the some -- to million couple can Jeff, this of goes demand, of just folks questions. demand there of some unfulfilled next Or go how this away? the is potentially -- continue which out last when roll much of quarters, of

Jeffrey Benck

reset fiscal because asking we and about want clarify and Last over -- appreciate plans a a I Jim. lot we I was Thanks, as year were perish got when had quarter, for were we a . of Yes. bit. the that little for got to people the roll know you set concerned a question ending 'XX. some year-end, to potential of budgets what's there

bulk the As and quarter, strongly to QX, will second that fulfill feel roll we half. not demand the able we anticipate we think QX the being about pretty that that of into this

that certainly to see though Just to fourth of it. we saw that in, in we fill just were cost to able unfulfilled But role. kind that's and of still Even always accomplish we as are more, attention us. continue of we cognizant pay kind demand quarter, the and

year. pretty that that staying level we think the about I So good in demand later feel of

James Ricchiuti

that where that of it across any X your the spread or challenging? business verticals? in X concentrated any Is constraints -- Is particularly is are

Jeffrey Benck

it's probably much. sectors, a pretty as -- that's really challenging Yes, the Semi-Cap from more I maybe in component standpoint, spread. wouldn't mean, I obviously, not including

on centered wouldn't pretty large constraints do that pretty assembly you to machines but we and It's broad-based. it's other have quite aluminum really that components, say of Semi-Cap not still Although it's X require maybe sensitive as on that. any spread. then I they're things sector. But

James Ricchiuti

just could, And a going point showed that wins. the to if of for slide back new business you I clarification, maybe

entirely list, existing many represent that these how new opposed as through look wins of customers new at to we As customers?

Jeffrey Benck

pretty It's balanced.

companies seeing to focus we're accounts growing of are and bring I on we new a But also that leaders, are footprint bringing us, we logos have. our that's larger put exciting that some new the the that that happy in. have strategic brand We're with logos. think to opportunities about

don't exact the didn't But... actually those that. I And as fair number go so the know there's and a in I split. through work mix of well.

Roop Lakkaraju

relatively Yes, Jim, it's about split. evenly evenly split,

James Ricchiuti

then the queue. And question, back I'll in just Got it. jump last

about what people? of are It just challenges that? of we're -- you labor as you is in terms seeing think kind you obviously hearing and cost like we actually pressures wondering, as all keeping you through are How -- looks a But are. I'm managing of pressures. Just much headwind

Jeffrey Benck

There the think I is a we're tell going both our points. on war pretty make managing saw you -- I Yes, I'll talent comment given as on. from a environment, results. will on But well you

probably we sure in we've to HR more sites. on And talent, we've that. I to additional stay put with but the focused that. to resource But agencies of to us have get got that spending really more and by to so that. all able the help recruiting make pressure, with on putting in a And we're dealing into our energy think than We're international been help U.S. way in do lot some the

some material a -- point we're costs to model, other of the with. product customers on we On work of customers. with that. we business contending the There of pass are as And always on because And costs together behalf lot look traditionally at we've bill component costs. that inflationary we inflation, costs and work we've absorbed our it's up, go that on our and their given

out, the where to quarter little customers But of balance it's a a in I call we like, want talked oh, be some partner. my in my about And remarks inflationary it's where there. just -- bit we'll a help great stuff a

absolutely don't some of see going And help so customers cases, we asking some costs inflationary in to we these away. are as

continuing And But what's really better utilization, as continue operational look efficiency we 'XX. to so that's in that driving and that's we're our through. our to something work that you for own with margin saw, improvements, improvement,

Operator

question next Schmidt Lake Street. with is The from Jaeson

Jaeson Schmidt

Congrats, circle it million sort unfulfilled want $XXX finish in of year. really demand. to the like I seems that to to a back strong

that sort How just clarification. how over much to of in of a sort from And Just much new was of of bookings roll QX? that relates QX?

Jeffrey Benck

had several, we've because QX last of It's going roll. quarter, we've that were level -- as is to the it in -- interesting had we every almost

that. go the fulfilled we So But imagine then and quarter. seen you as -- through . we've some orders that of can we've in backfill come we new

are any for customers we're that but the improving is ramping, pretty many at load them. strong some So order would seeing rolls, percent of given say quarter, of our future economy as I

the in If come issue, in you the upside seeing bit X a actually we fill months to right? a demand, load we're we got amount actually Jaeson, would in. so product provided too, that's within lead I that's of months. -- haven't fair now. and don't Certainly, at coming want better We be But that. I other say time have a in, new that. So quite cut there's in of visibility site Well, -- level, lead of a we've might now and X hey, go,

would can't probably but okay, that wanted they we is, quarter. in show quarter, third So land first until

kind of fulfill as we -- think still given well the And current But would right? some unfortunately about bookings that where get it's see mix we new have little into as that couldn't of in some the I we new unrealistic how go kind a customers orders as that a bucket, So requested fast can things quarter. environment. you

Jaeson Schmidt

segments, end better Medical helpful. you Okay, supply really that's the like big demand? Industrial, know Are just environment? what really on Telecom there. chain Was that wild some back out meet the And it the October. in outperformed I previously that the card driven guys particular, clearly expected supply based able and at you of to is obviously of by But a

Roop Lakkaraju

and of 'XX Medical Yes, that's sectors had an additional us it. we that Jaeson, those assess to as through, allowed demand quarter throughout the the side in that carries I get backlog 'XX. say we able way to which think to would accurate on we into We some get the across were parts especially fulfill

Jeffrey Benck

as quarter a really had strong Semi-Cap well. fourth

of of improving the strong Semi-Cap better, on. seasonality to. And sort So at as pointed in staying fourth even sort industrial did really just quarter. with level going super do the it's But QX that we half second a started had in

Jaeson Schmidt

one for me, into queue. Okay. and And back just last I'll the jump

target of making? you're do of What Can sales that? it really guys more explain seeing so mean, kind coming it in is your of just I from kind engineering been you the the increase Sort demand rate. there? you efforts think have in sort momentum just is Is driving of you the the attach customers? concentrated the

Jeffrey Benck

a making well with engineering our around that wrapping go-to-market EMS or clothing is we're on put established definitely big deals now. that we've effort sure pretty and opportunities Yes,

I think know I of years did a even we our when of lot a arrived don't ago, engineering couple customers necessarily.

trying we work. to And to engineers right? think if lean customers one, for can we an you're that get well, to labor, on trend come it be is help tight us the of an grow more really are accelerate of us to But program help extension looking I can't a you team. and So hire happening And fulfill to you so are have awareness and to XX is I do in to as your that and thing. industry them also we market people you can part think,

knows I opportunity. the can a are that And manufacturer. to haven't some or who And design, manufacturability opportunity can it to for doing we're constrained will cases, make for every up it about doing that this our talent you, go-to-market are better intention We design our a team won We that we But for So equipment. there. do teams bringing are than just designed really participate but And to that the I it's we want manufacturing can which don't we more yet, the build design product design develop some develop think can -- have to test in manufacturability develop engineering we because tell the whole the for product. great that's we physical in sure do clearly of. we environment, us. we

another And pushing that that's certainly so on. trend we're

Operator

with from Sidoti. Soderstrom is question Anja next The

Anja Soderstrom

just I follow-up. have a

being being of talent driver do constraints? supply you talking outsourcing in the were parts. a due business How what constraints to about your about see more X Or You increase terms Do of prone the you to see customers for chain your it? this?

Jeffrey Benck

a OEMs come can Can have they're here help skills because resources continue our partnering really day to chain and have try to crazy with I resources thanks invested you put working environment. our such right? certainly And We are night supply a we're They add got lot Hey, problems. mean help, Chief organization. Officer into us parts? find team. under I and solve we customers. to -- is new to It's find our for parts? a these these like mean, it to to of Procurement taxing I additional

so many I that had more I parts years. challenging, leads find wins I the we've know more. think program a X.X new for going know I over outsource investing anymore. it's certainly, to customer But don't I'm the first So last can't if given say, to we're time hey, because

ramp And focus I and of there's are they that. our that help and so a the and you're middle right on extending times help about the just time frankly, customers. trying as to and think, you're us. supporting trying to parts you lot But get pressure ramping think lead And at those, in we're a really, of

it's so And really about partnership. the

Anja Soderstrom

associate And are term what longer you you times to than than I have in see have so mean decommits? decommits longer, also -- terms do as times, longer you risk it's of lead for right?

Jeffrey Benck

QX secure the One feels more which supply, about obviously, were It why QX, to thing I our overachieve. to right now, more dealing bit of that so environment would we we that. challenging our will through. able outlook is able hoped QX, beginning than frankly, but factored almost have with It like But were we're a quarter. the feels improve a I into that's in QX. view just say still we're would for bit,

still those. happening, of we do are in of even can the what no So we're there question. anticipating some certainly face decommits And

anyone think being I really upfront about otherwise that you it. is tells not

Anja Soderstrom

improving that It to improve? the do this through you of sort it half like think what any now year. people and would there more environment seeing in you of to needs chain you what seems constraints second It seems I improving people And this improve? of thought the are -- are be more to it year? happen What are slowly? think the it to sort also, for think and going supply improvement? seeing happen start needs to out Okay. Or some Or like are sustaining for

Roop Lakkaraju

to from continues as indicated in we we 'XX, guess, you went last to our XXXX. it -- our And broad-based. of should 'XX, it, as prepared to back perspective, extend not through we and the middle improving. we And had And as it go be it going see we middle remarks, thought of I saw I improvement. about we mean year, by through should if thought

of from are marketplace be on and 'XX. You'll commodity what could I how strong standpoint more today with to still your across question be strength think just constrained, parts the change? in see categories, the and To has in to there, but demand pockets then it's continues even there mean generally a improvement environment here our from allocation. demand and of is perspective, we the

need of people at capacity place end day. the additional put think in the to I incremental the demand support to

Jeffrey Benck

self-serving our a we We're parts. problem so we solve being more for little to just with more build customers equipment because can build wafers need the Semi-Cap ultimately and

get So we're trying to that.

Roop Lakkaraju

Right.

Jeffrey Benck

truthfully, think that's we're why I But thinking...

Anja Soderstrom

You're ahead a you capacity the little build right? before all bit up then of this because happened, that

Jeffrey Benck

also in was I would a But that partners CEOs, last quarter us the they tell are out. with doing when third that microelectronics, X-year supply they that working adding capacity, from we're Right, started ours second you a suppliers other but our of and knew journey year, it quarter, they minimum. at

said middle why half. So right, kind which initially is we this year, really kick of of until that had in doesn't second

has gotten think is environment the demand the what's as meantime, that well. in stronger happened I

capacity, So that, because it's compounding but not what, guess where enough. adding of we're kind of it's

dealing elongate. back we're so end. hoping us be sequential to the see are we going that we through seeing certainly But all that improvement of 'XX. We're believe And with in we

Anja Soderstrom

then derisks of year? that is next built capacity sort But it 'XX some extent, be that should to helpful, into right? Okay. So

Jeffrey Benck

whole I support is the up continued of And federal we've in a super demand. we've Semi-Cap domestically. the coming additional fabs Phoenix think sort adding on Certainly, the new government investment Yes. know a from Yes, here focus looking potential I Valley. that U.S. that's couple capital from and at fabs the got cycle and equipment, what here, a sort of of said also just given

another So . as there well. driver that's

Operator

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

Lisa Weeks

again call today. our you joining for Thank

also questions the follow Spring that to to reminder reach you supporting have any please want earnings will I'll a our If follow-up be Benchmark release and today, put don't I happy Sidoti regarding out, hesitate up. be to our you. we Thank event. March, in afternoon, look results in at engaging to to April earnings and our with this with great you a and look call. forward sharing first quarter have Please you we Conference forward

Operator

has attending now for presentation. you The Thank concluded. today's conference

disconnect. now may You

Benchmark Electronics (BHE) 4 Feb 222021 Q4 Earnings call transcript