BHE - Earnings call transcript Q2 2024 | Benchmark Electronics, Inc.

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

Operator

Good day, everyone, and welcome to today's Benchmark Second Quarter 2024 Earnings Call and Webcast. [Operator Instructions] Please note today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Paul Mansky with Investor Relations at Benchmark Electronics. Please go ahead.

Paul Mansky

Thank you, Chloe, and thanks, everyone, for joining us today for Benchmark's second quarter 2024 earnings call.

Joining me this afternoon are Jeff Benck, CEO and President; and Arvind Kamal, Interim CFO. After the market closed today, we issued an earnings release pertaining to our financial performance for the second quarter of 2024, and we have prepared a presentation that we'll reference on this call. under Relations online website of available bench.com. at are the section Investor our Both being and webcast be is call This live, following call. available a the online will replay non-GAAP reconciliation The X provided the in on review appendix take as of the measures presentation. Please in in the the moment our well company presentation. as this a Slide GAAP a has to forward-looking release earnings disclosure to to statements

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

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

of our performance. will insight by guidance. share with For business today's call, into financial Jeff detailed Jeff final to wins trends remarks. and will our summary second then will Arvind our begin third discuss more and demand a by provide results return quarter some new then quarter sector, close providing

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

Jeffrey Benck

Thank you, afternoon, Paul. everyone call today. thanks joining to our Good and

met range to and Our results our exceeded progress proof objectives. flow. are our cash free for guidance or We long-term point outstanding consistent our revenue, margin, operating EPS of another quarter second non-GAAP

high above me our step Let through guidance a revenue of end of the few million was Total $XXX highlights. range.

A&D despite with and revenue. us We softness which outperform allowed year-over-year and industrials, in Semi-Cap, advanced to are pleased computing medical sectors, communications sequential strength and in anticipated and on

quarter XX%, sixth expansion. of margin margins gross exceeded again consecutive non-GAAP the Our year-over-year marking

per quarter us able inventory a time, margin basis our quarter, in above a in us the last versus also free million of with was revenue was performance, capital the point working positive deliver second upside, non-GAAP guidance. X.X% last above same quarter, expansion enabler of deliver This year. $XX high of initiatives the margin down earnings benefit end which flow to being This we to in operating place end $X.XX to non-GAAP to the we million. high the put Notably, $XX share guidance. At enabled coupled continue year-over-year. of XX represents cash was from Our the key

We $XXX cash quarters. last million have over now over generated the free flow in X

work there's our they pleased Although that and consistent delivered. results to be left done, with I'm the team's execution

Now for to me guidance Arvind details share the QX over pass it to more on quarter June XXXX. let and

Arvind Kamal

and Please for Slide you, good revenue afternoon. to turn X sector. market our Thank Jeff, by

total Semi-Cap revenue year-over-year. was revenue million. X% As QX Jeff in $XXX our increased mentioned,

of continue decline and revenue capitalize driven We we'll XX%. partially to improvement offset it. Industrial The are XX%. to was well exit We the growth to year-on-year as sector signs return see program in demand from year. Medical decreased we existing market believe customers, reduced in down by this new by was on ramps. the positioned revenue

and demand the see launch to XX%. a remained ramps aviation space revenue medical we where continue see demand applications. inventory will programs. more rebalancing through. A&D we're few weakness within Commercial We quarters work program was and strong, existing both at to least devices. impacting up demand defense, continue benefiting of to take aerospace Meanwhile, and from This robust new within end

balance to of expect continue We the this throughout the year.

business. Please Slide being HPC or we manage how next-generation our AC&C. and forward, decline year-over-year. sectors as X. with internally. driven was as in large decreased the year, XX% in we aligns advanced going earlier turn communications weakness Finally, several programs last computing closely coupled mentioned This reporting by be these more to we'll with completed communications quarter, AC&C This sector continued one

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

Our guidance of range $X.XX. $X.XX of our end the high to non-GAAP $X.XX, was EPS which exceeded

expenses. restructuring exclude stock-based results assets and our a As non-GAAP amortization intangible reminder, compensation, of

down XX non-GAAP margin QX, basis point XX.X%. up driven expense and point and margin was increase XX points $XX.X margin sequentially represents Non-GAAP year-over-year. Non-GAAP expansion. by increase XXX X.X%, up year-over-year, million, basis operating X% a For sequentially SG&A was basis points was XX This sequentially a our X% and basis down gross year-over-year. gross

to Our focus rate XX%. performance. our of basis. demand X for expense maintain turn second on continues focus of cash end X.X%. Please second and on Non-GAAP conversion the for year-on-year expand to discussion quarter we ROIC protecting cycle a margin, strength quarter a level in discipline. Please non-GAAP sharp to was a high tax markets, which Slide effective of our non-GAAP turn financials X in to Slide value due our Regardless was trended the

execute conversion X-day cash improvement cycle to an days million efficiency be during quarter. Please working generate flow This cash flow reduction the our income a by performance QX, capital were days QX. enabled free to In cash for XX in with cash company. days the XX of combined which, million on was a performance, us Slide key to Free flow in quarter metric inventory in $XX the plan, in for and million $XX to liquidity. we update Our driven net turn continues operating our continued $XX X in to the on period. primarily compared generation

we to forecast now on our the million greater and flow cash expect of Given raising year our deliver balance first free again $XXX than the full year, half are throughout XXXX year. We estimate. performance the

cash further $XXX cash June million. on leveraged million. the a free we increase Our our $XX debt In by to balance million, performance quarter, was $XX June flow reduce XX of sequential

$XXX our under borrow million of June to $XXX and million XX, outstanding available million revolver. As had against our term $XXX we revolver our on outstanding loan,

We and and we being in Penang $X QX returned both the invested approximately CapEx of in growth our in have in to quarter, million net the Mexico facilities. of of capabilities cash support continued As end positive. enhanced

to cash repurchase $X.X any of We in million. In be expect to year the of million million $XX CapEx did between million. we in We a QX. not $XX $XX full paid anticipate shares basis, and $XX be million. On QX CapEx QX, we to range dividends

As Slide of had authorization. Please in we million share June remaining advance repurchase XX. our approximately $XXX XX, existing to

Turning to guidance.

$XXX range the $XXX in million. be million to to revenue of QX expect We

We expect non-GAAP consistent of operating to expected range SG&A XX%, million expected between the expense and several $XX X%. quarters. be margin approximately $XX is within X.X% margins gross million. Non-GAAP be to with be to is to last

As expenses. a reminder, other non-GAAP million million $X.X of income operating assets amortization $X.X excludes restructuring of intangible compensation, estimated $X stock-based of approximately million and of and

in Our the expected $X.XX. of to Other non-GAAP net, $X.XX diluted approximately to per be are share be earnings expenses, range $X million. and expected is

decline partially be sequentially, Although will interest by exchange increased to is offset foreign this expense headwinds. expected

the range to rate XXXX a with -- count basis, back On our to will XX.X the Jeff. non-GAAP average XX%, XX%. And effective will average you, million. over be that, a from tax be rate XX% call should We expect that we in I with turn QX, weighted share tax year approximately approximately effective will fiscal believe of

Jeffrey Benck

turn Please Thanks, XX. Arvind. Slide to

their Let signs was to me second to time, to further up bit year-over-year within programs are see becoming new a from color performance ramp. where expectations we're our Within the X% to large quarter, benefiting which better existing program growth several on sector. continued gain highlighted sequentially, key the some projected recovery than second in at a while customers, second as and This support by our by a an new beginning source quarter share. We're start with win plans. same X% entering of performance we win momentum continue from starting quarter Semi-Cap, at OEM wins, our the

supplier building This are that a reinforcing quarter in not only a continue to we semiconductor our build trusted saw but equipment, as partner. upon also us increasingly engineering wins, capital design

multiple the the in although some bringing market's term, still are driving of in enable Penang, this customers as we newest be recovery investment early down, the revenue opening to year. will double-digit Malaysia we future believe this pursuing with -- sector inventory us levels continue about the of in recovery, to we optimistic evidenced growth semi-cap Semi-Cap which later continued the building stages in catalysts range are grow believe planned the low We by are our quarter. Near this capital and of

improved potential signs Looking a for demand broadly environment. to pointing the XXXX, are to

Given opportunity have couple gain in share. In over quarters, wins sector seen continue softness we performance, quarters, of by expansion, with the we're great demand in capacity coupled a notably last our and medical last over confident end position as inventory has OEM medical, to exacerbated this I'm capture challenged the program devices. several our to consumption

Our XX% June was year-over-year. quarter down revenue

While biotech subsectors. in medical to the both near continue persist, new term manufacturing we the and in and expect these in we headwinds will device wins program engineering secure

current programs half the we meantime, Looking medical will consistent XXXX. of through forward, sector remain the to as expect levels In revenue these new progress in begin we contribute we expect second XXXX. with to

industrials. complex Turning to

including this quarter, data Very measurement a future engineering test extend in year-over-year growth sign flat to we industrial markets automatic growth key continue wins as in our ID We capture down manufacturing business, the wins with in lead and share in to sequentially. solutions. importantly, of past dozen XX% and our over quarter and we that expect was secured wins. Industrial's and QX revenue manufacturing will a

the Although growth seeing conditions continues, persist softness our new expect of a September potential program near-term existing XXXX. several indications our return of these demand we during are of to many with programs. momentum win to peers, we our impact exiting quarter early Like

strong XX% Turning quarter performance, sequentially. X% to another of had A&D. revenue up and We year-on-year

and ramping both new see to continues business program existing wins. defense Our from demand business strength

benefiting also as we balance space demand. Within Continued more with stayed improvement several aerospace, good supply applications. a in commercial is to quarters are meet us has fully for strong air chain and our able demand between

we with new subsector. customer, air As commercial the within program during space an won winning of a the example time, expansion wins the this, while manufacturing quarter, a of existing at substantial multiple same

the here is While of these momentum early are stage, encouraging. our breadth

to September the year-over-year quarter, grow we revenue on both and at basis. Looking sequential solidly, expect a

performance year of June AC&C expected XX% excess revenue on in and year-to-date expectations, sequentially the half XX% in XX%. Total a back our Given to full A&D basis year-over-year quarter. revenue grow declined and is

half continued as of customer We in a the last quarter. Despite revenue to pressure quarter. in the significant pressures disengagement the through back to sector challenges, in first new as year, and our programs half continued near-term completion computing win driven of communications the discussed the expect the of high-performance by business several persist result significant we subsector

our in and return manufacturing highlight on solid Slide for XXXX. In turn the another sector a transport Just were built of for access with will mutual customers, Benchmark XX. Despite share growth we thank all dynamics, and the in Evidence summary, to our expect customers' costs margins logos while to our to we one, in of success we I to of our which build new existing execution growth. awarded improve Once our a please quarter business on team with support wireless want future while consistent efficiencies family to systems, this delivery. bringing driving ability this customers. down is and continue contribute to to both for again, challenging market in to invest expanding operating

every our introducing and of provided this As flow. demand I operating look way down quarter growth, the than QX margin remain to our XXXX to target on cash achieving non-GAAP Despite inventory progress at metric. full margin a macro X% on The since well working impacted XXXX we we model. We're we've year-on-year free to basis. our steady back greater XXXX the revenue and on one continue been driving expansion make is environment. gross Also, 'XX, our per targets, we non-GAAP of year operating committed goal almost delivered exception has objectives volatility, by every which in

helping quarter quarter inventory free second to consecutive flow. was cash achieve million year-over-year, Our positive $XXX our down of us fifth

inventory letting XXXX for million. forecast provides not we us up, our to improvement. continued than expect cash This free is and focus $XXX to increase Our greater flow on confidence

announced to to to we returning Today, to an quarterly approved increase $X.XX capital per effective committed Board regular immediately. we that dividend Lastly, share, investors. has the our

so Although shares periods. in quarter, do the intend we did to not we repurchase coming in

may Q&A out, further are about more optimistic reacceleration, XXXX. later growth cautiously will to take not during we supporting industrials year. for the this A&D steadfast we of is and the now supporters year. Meantime, environment for we our to each operator little of Medical recover to us growth position by bit we our sectors clear our and the operators the I'll course seeing doing later turn will we're across best remain in all, ourselves over front a indications incredible next remains as set many, the to a disciplined Looking Semi-Cap this but of demand AC&C begin time, improves. With call can and Only opportunities believe of the that, poised maximize if of strong. conduct customers. session.

Operator

Advisors. Fox We'll move Fox with to [Operator Instructions] first Steven

Steven Fox

the on few to start I a I had questions. wanted flow story. off cash I guess

So couple some over we years, obviously, there's If ebbs getting like you said, flows. better of each last it's big and back been quarter. been the look

get the we what flow then a follow-ups. cash end as So had of flow of can free like maybe -- you about business? think And normalized on a year, how couple do the this I through cash look

Arvind Kamal

Yes, Steve. This is Arvind.

I the year, remarks, at stated prepared in think the inventory flow. cash a we've million that not of backbone of $XXX done to half the little through if million, $XX be think our is had as reduction we The of going first bit it's We greater. improvement. least

So think so half in million of $XX improvement that flow $XX can or you year. I the definitely see cash of back million or the

kind Obviously, million in to we've we months. mean, off and When doing think there think has but that healthy first we've a you significant But in of foremost. driven and which still and I allowed a also we're we by go-forward cash free $XX beyond. $XX stood will do of see basis. pretty million But that at we're the cash us I it'd start 'XX. down, kind projected, think you over 'XX initially a more than look of flow, So you be flow inventory kind balance, cash up and that on I last XX better normalized moderate, us the to outperforming coming than

Steven Fox

Okay.

So million forward, to kind million of I right? Is guess. that is base case $XX going $XX a

Arvind Kamal

thinking That's how about we're today. it

Steven Fox

-- Penang. the And little then, few up? new mentioned just in And Penang. mentioned you going and things Jeff, bit you on You a Great. Mexico expand Okay. But like opening plants can expand on a you over we how comes that quarters? capacity And as next what's are sort where's capacity, need business the how added right for you back, of now? few being feel to do

Jeffrey Benck

thanks. Yes, Yes.

close low-cost with in clearly where in X consumption I think near to capacity low-cost expanding We're -- regions you regionally us. our are see is. dynamics that

the supporting actually, And recently, a have facility So COO just market. there, it's about was Guadalajara. where the in with we Mexico, going footprint or over doubled there already of site facility, that a almost we over we opening just on that on. Correspondingly, in we just our in capacity new Romania, expansion online coming building in a an Europe on the that. That's have talked and

So nearshore, customers that with Phoenix assembly will here but and back other in in the just from earlier sense give outsourcing, for bit machining, we're sophisticated facility remarks want did still that see see -- China us Semi-Cap complements to a over in many for Precision potential excited continue an that and referenced and move to quite that Penang feel regionalize I we that in to we capability Asia, the new we, brand-new growing general, year. add room we'll sits we've about a towards opening That's expansion which the that is it semiconductor and there. capacity, our made in some of We and third Group. be to the like in quarter, us Penang we'll region in footprint the there. The where investment had one market. be That looking clean about Technology we think, in additional the there building in

available we're So and invested this have in I well upswing semi well business. now the expand situated next will positioned we downturn the as think we because capacity in where be

Steven Fox

cycle. in. more could It I kind in sounds if of squeeze one And you're calling spring Great. semi-cap like

just it? baseball So a ground? on curious it's it you're is I looking sunny was and spring Or at like the of there frost Is what kind season...

Jeffrey Benck

year down. will about have talking year now others We're be a growth constructive. more capital this said in double-digit incrementally spending that We're

then few to across logic inventory And -- our to that at are customers incremental wins exposed half. been we've a there. there's of we led see with second little improvement it watching think there's when more are recovery a of probably you incremental we're some growing But our close. set and are memory starting Kind been done a in well mix. But that the on look that seeing feel others we've there. the side. certainly like we I We're position

we more whether than second or just see year sequential positive. it shakes would how and So it's growth we stabilized be a super on to certainly start be half 'XX the like, growth. and see What incrementally I interested I'll looks say out

be -- early a I to midst beginning certainly, we'll of the we're call think it's little where in whether space. more on summer 'XX constructive by 'XX. But of this

Operator

move We'll Melissa next James. with Fairbanks Raymond to

Melissa Dailey Fairbanks

the with a just in there good inventories expansion Really, well. we flow ramps? production results. for Have location? really the anything quarter. just should kind flow as and the on which and disclosed off. Maybe would the OpEx you. progress cash be on I few of Is Sorry the quick Great that you through for the you're from as have servicing Great see also Romania. cut a end expansion? to that Or you assuming follow-up free questions markets to revenue

Jeffrey Benck

Yes. give question. a I that There's been step both. have been benefit able It's good big our expand operating the that We into really you color footprint in. No, certainly we're on we've there. little expense. to not a factored a up in can

to -- almost it manufacturing So didn't like because other add the need funny, but offices it's there's was is only in parts. doubled, we

lot expense, a was is a it doing in industrial which great. We're modest space in So that incremental the facility.

key a growth as kind there. industrial to look I So of opportunity

side as machining, also semi-cap not support We but on complex things, the well, do more EMS some more from of assemblies. there

would the most I effort of say that's So is. where

opportunity X those focus have that in for the medical and But customers Europe, Of site. sectors we there do there's are course, for growth.

Melissa Dailey Fairbanks

be little maybe to what if wondering if you can Great. could business your Jeff, compared at engineering the what opportunity manufacturing be, as that could I highlighted quantified in give wins point? And profile lot maybe, on that of this color you of like a And margin something a that's us was looks more revenue segments. then of that many wins? versus

Jeffrey Benck

obviously, help engineering but to bit it's customers early Yes. smaller a it that it, product. better for We who in product when we We're engineering unique design the we mean, out. tend company, and we But total test, doing And I there. design doing be development. get and to revenue, a be it's the we -- point, product We of involved track that. because oftentimes, be love at meaningful haven't build a typically we'll to from us, go percent broken for realization might

our as kind grow good that a indicator early that. From opportunity corporate of gross of the but look us and extension pay They we'd it we team. again, IP. do of higher we their the at standpoint, customers So competitive a for is work do to a an margin margin, because space, we be the engineering it than engineering work can an keep beyond pretty do, it's love

much. And opportunity thing be to helping into but we we could how our mean, that I engineering and we to yes, quicker involves focused those quite certainly also the we're and attach it -- and vice not only at so bit get more that's in what win it we revenue, like EMS but really going rates engineering, -- in customers market engineering versa, want in so really flow-through to medical, industrial much on. We're it's design obviously, for And work a semi-cap, the if with looking be capture manufacturing. from -- of grow standpoint, not we on the we're that I'm start we business, to manufacturing. could of not if But segments. look want accretive, at have probably seen the continue sure the

Melissa Dailey Fairbanks

Great.

good. squeeze Sounds I can one more. If in

business. highest the just or kind maybe see -- Semi-Cap margin that Semi-Cap close there. we're to corner of on think following Nice your highest that, the maybe turning to I is

still at parts? more Or a least margin be a XXXX? for not Is many anything spring, mild it into -- assuming may spring. a progression so there should moving Some are Tempe be spring, but maybe there we the

Jeffrey Benck

then the average margin of might it depends super greater more corporate be range. on the business. clean the corporate value-add, is kind of type it than sophisticated, it's if mean gross margin end It on gross higher and I of room,

that row. we obviously, been really, there's in help I So in us. from further couple that's a -- bit there regulated where north that. help go certainly standpoint, certainly now we've and markets. us a in play of And it discriminating on quarters a opportunity can But can of highly mean, by being we're Semi-Cap XX%

there's equipment the that depend, to I of with buildings do buy are out more they're think see Or Act of plenty just catalysts it as the there's capital it's Certainly, really and to out a stick? is we going come those I several a coming online. in hockey gradual Phoenix, the here know going CHIPS and of ramp? ground there

amount gaining think I of about a of down, environment, flatter that with market I what won't we've just business, the most me probably what's I the I'll in excites share flatter that's double-digit even and is helping say semi won say think recovery, independent growth. I'd a us and fair really grow we're say,

we've invested as that opportunities in really their and we -- so of my competitors those down. trimmed in have doubled semi, And some kick where capital if

a do as So to pretty But got get on work it. I 'XX. that -- see constructive Calling it's and like to where XXXX. into still said, for landing we margin I larger exactly that both revenue lands, we're, contributor expect be we on

Operator

Schmidt next Jaeson to Lake move with We'll Street.

Jaeson Schmidt

of new given question just Should know to this sort the of up fourth the good Obviously, margin. on this that last gross based of be of gross sort double-digit on we guide, consecutive be you the to will the use think forward? but Just quarter forward? QX range it's rate margin. level following programs of on after, a run double-digit go I mix-dependent, going going going kind is

Arvind Kamal

is Yes. Jaeson, Arvind. this

take me one. that Let

margin we going we meant as about and forward we but we pleased And as and based as think about to expense color high-value on definitely a our we're our think and be not forward. with certainly go focus just performance how give So just management. guide, you

added through, some go come definitely we especially expansion. Once seeing potentially going see optimization and that or with there's should incremental see margin volume opportunity higher. Same and more margin. load factory on a with bit volume continued to for focus As to that expenses, holds margin operating we little greater margin, we equal operating be start see

Jeffrey Benck

just color little comments. I'm Yes. agree a -- Maybe I'd add to Arvind's going to totally with

to bit some We a it's talked this on number right, little going a on of loading. about that capacity think depend incremental even factories, in I call. of

And to the so, meaningful, further particularly macro given not And part now, the -- back, see couple in of going modest of environments to of will looking to the contribution, about. already that of of seeing certainly right be right the be further. take we're while kind decline we a a some talked couple that a is in the that revenue I growth really step softness think sectors, progression. We're as revenue I really semi but also think to

and in So aren't business to think we're incremental dimension. worked done have seen But operational already going really lot a that an in cadence. right the the we've that I getting demand well efficiency, sites and have in on help we and have that programs we loaded and that the continue we've environment softer fully in growth will the wins where we

Jaeson Schmidt

as helpful. And follow-up. That's a just Okay. then

is demand seeing momentum the share taking really the some a really in driven by overall A&D it Is guys traction You're nice of this programs? being environment? Or of and you winning these segment. function new more

Jeffrey Benck

supply mean, and the I challenges. to -- availability segment chain constrained I there. things due most A&D was would component we certainly, probably couple say, A of

that fact, some In we our reference heard still. of peers

I cleared think tremendous of a we've amount that.

a programs a more helped. us mean, as we're allowed of obviously, is committed existing also new that's so then to little there to. that And are wins recover. of a this and And we it But maybe of adding lot than I you really that bit there that segment might see backlog to some have grew is A quarter. was combination XX% that that

unfortunate they're on The of of other there's I'd spending because require unfortunately lot the defense unfortunately a there. the usually a around is spending. related thing wars. of say world a that driving lot lot activity side, defense Wars

driver demand, we're and just And just and that country making also such. so a overall that's the our in protecting sure then

to the to I but mix ability a by So market wins the better demand. fulfill new and looks overall think strong, of be as continue well that then to just supported

So it's moving some parts that, us Jaeson, on factor, more than one but few a color. gives hopefully

Operator

Jim Company. Needham And next we'll & move to Ricchiuti with

Chris Grenga

Chris Grenga for on is Jim. This

some Just growth if of early that indications the the that you you about elaborate seeing could wondering the on you're industrial. mentioned in specialty

if on wondering you're could there. you Just what seeing elaborate just

Jeffrey Benck

see more efficient. I number a get there's folks think on focus do on going of at how are there. they dynamics We automation, looking continued

variable around marketplace, go moving speed. furnaces and We good from on/off even for also see that HVAC if the energy the you a variable speed lot of you and market, controls, pumps to to effort there. see control we in growth systems. It's folks take interesting heat example, from as And happens transition

electronics you've involved. Now got

an demand an efficient, in and to of that devices. see adding also speed opportunity but at these the a variable People to want be lot in interesting energy growth electronics us. time same is for smartness So more nature

industrial with a a number excited strong pipeline think of we've have grown think that participation, I playing can about we're a there's And -- of in an do there. We customers our wins. that area and So lot but that, we do. that's more we're we it's

we market a is for we there. think built like -- team. a on lot came compelling at Officer, offer as of has energy his We're a have our one ton I see and Chief we there David industrial opportunity just And things when because of customers and putting in experience, we the so Commercial out described. Moezidis HVAC look he's just

like of we've space and and operationally to efficient, more robotics solutions the Everyone's and those like be experience putting also happening kind systems a with what's there. We together. complex of trying lot got

our So bit. a thoughts that's on playing into industrial

Chris Grenga

overlap exposure the advanced Within any Or there training Is that... to it. with is the high-performance AI overlap compute franchise? Got compute, or any any clusters?

Jeffrey Benck

yes, -- sorry, to cut It's Yes. I mean didn't you off.

Chris Grenga

curious Just or is there? overlap exposure any, there if what,

Jeffrey Benck

Yes.

have largest supercomputers. the of some -- the largest of helped build We some built

role key the simulations customers looking talked supporting a and played bent of If if it's large-scale in you the whether to movement. lab systems into company do going, our And to several have to it of it. look an AI a where XXX, And about that's national you certainly mean, top at top playing or look has analysis, couple these I a sophisticated AI X, we oftentimes water-cooled HPC, they're that.

participate. So that's we an area can we think where

While environments the in we is around some one a do. energy platforms, play into HPC natural played the guys the systems of don't most effort and And think around climate build they're our -- space certainly the heavily. some of is can lot sophisticated and to our of We solve. solutions. that in hyperscaler pretty putting have problems looking other where these a complex everybody We analysis

that that else, with an natural just a you for of about it's fab and is when think intelligence mean is in Another area or semiconductors into And a IoT solutions or I certainly wafer whether going computing, be you're I equipment those there. bit opportunity just just right? Even of there, you the everywhere of AI kind HPC, the semi-cap, anything could AI effort is play. but semi-cap same role of It the quite do get EV vehicles explosion that, as we see smarter. lot going mean hyperscaler, not how hitting plays and argue, on the we there's a know But there's one we play. can may the quantum

Operator

Soderstrom Anja to next move Sidoti. with We'll

Anja Soderstrom

come anticipate a I this markets. And what in heard out seeing medical, lot the that of terms there I inventory do buildup? missed bottoming you of other in when of terms the about if that Sorry But you are back? talk to maybe part, end you in but

Jeffrey Benck

Yes.

as devices I device to to build talked the medical imagine. -- pretty think of know because support. can the medical medical, you I that side, we're to we we've about it's some interesting exposed

a we We that get softness sensitive down. out have were seen seen buildup COVID that know there. some their inventory bringing more about there of And coming our inventories we've OEMs

the seen have of a also customers. across some in We -- softness number

one that it's certainly not So tell softness. I seen customer, particular can medical you we've but

right thinking have some we Our at now, stabilization. seen least

of just pickup that that uncommon off based visibility, clip, do to signals through we we X on we're So of falling it's see probably won't the the like have months not substantial end the but not anything visibility. back 'XX getting into think

for we definitely of the on, believe see we have, in this medical -- see lot second on half, our the collective opportunity are going in different in medical new everyone of a lot -- some recovery opportunity the to that a growth large amazing new are bit we doing of hard half medical industry very customers and is on pretty there. in to DNA softer really 'XX. I be around, that's is have the for little segment a term, new which drugs turn device that biotech revenue that weighing great area is the We year. But A and broad, exciting lot and there, wins some to that so I predict us -- that's health, certainly see one a and like going business, investment we it's growth be and we'll is but is first new that we sequencing 'XX, we're some will there, and in an everybody our we'll more if a believe say really the think see fairly are has But and seeing short or do in we work that there. But new will solutions right? area of -- exposure.

Anja Soderstrom

room do if have more flow there? again, been And cash quite a cycle you talked And about has you this Okay. before, your days, a lot. there but sorry target? cash improving the Is

Arvind Kamal

this Anja, Arvind. Yes. is

the talked or bit we call out driving our turns. free inventory is raised inventory. million And $XXX of Currently, or we seen our today, reduction. our turns really about as X little plan cash for greater. to And a laid least we we're flow target as we're -- be looking heard we be in that at So X to what's long-term you've about from XXXX,

million there's you definitely there. can year type a So on to go yes, flow to $XX average $XX assume for for some the modeling. cash of million But ways I free type of now, that think

Jeffrey Benck

number turns. done has we're customers inventory and as room said, focus, journey And think have -- and working an the it's the with with to Arvind the don't burning as to Yes. down. team think of inventories on down been nice to on we We bringing about with work explicit We go. talked still inventories I continue he that see

have back amount We're that. more with we're So not would to when we progress, -- opportunity certainly pleased a tremendous there's say what expect would I of made here. and But down to where be. normal we

Anja Soderstrom

cash buy reason for quarter. any sheet? one that I the may question, this shares You your if didn't then your Is for or? balance on back then. there any And last Okay. practice What's

Arvind Kamal

term pay I to we'll Anja, the debt, short-term mentioned we call And really as we've revolver. think bringing the you've really over increased our that. do the down think been the is I and continue we've quarters, short balance on last been, And dividend. Yes. several focus to has seen our focused down in in that our today,

that to looking at but as still repurchase So remain on we -- with we shares opportunities outlined. focused

Operator

I And it this or closing back does conclude session. turn any will the now question-and-answer for additional to Paul remarks.

Paul Mansky

in and thank for participating you, everyone, quarter Chloe, earnings you, Benchmark's Thank second call. XXXX

that, As a Annual speaking Industrial thank Clean coming we'll again and Virtual August IR section Events soon. investor ir.bench.com forward Conference updates conferences. With Tech, with the Needham and website Tech for our to XX. attending your you we of you on the check Robotics, for to be reminder, look Please support at XXth

Operator

conclude today's This does your participation. program. you for Thank

afternoon. may have time, wonderful and disconnect any You at a

Benchmark Electronics (BHE) 30 Jul 242024 Q2 Earnings call transcript