SMTC (SMTX) 7 Nov 202020 Q3 Earnings call transcript

Good day and welcome to the SMTC Third Quarter 2020 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask question. [Operator Instructions] Please note this event is being recorded. I would like to turn the conference over to Blair McInnis, Vice President of Finance. ahead. go Please

Thank you.

forward-looking I will the future include financial that future currently cautions be will forward-looking that may foresees. call, date what like Form remind events by the update various substantially on events factors Company's subject factors, of statements affect and reports are performance the number may the Company's Form the affected contained that results X-K with to intend and do are and from filings made would of of as results required statements call. report XX-Q, are is All in Discussion that begin which the and presentation And actual everybody beyond we of law, and except a we Company to control, Form information. Before risks annual of on nature uncertainties. the in about Company The future by to other not many Securities and that on results reports vary subsequent and this XX-K, Commission. quarterly and this the as Exchange expected

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which to interested The deck link conference find today's Finally, of www.smtc.com. also be section the parties website on Relations to Investor can webcast that the this will for at a posted has includes link the Company available call today's SMTC's next slide webcast.

SMTC's referring now Officer. be will over pass time I the will this call Executive We morning. Ed to these time during slides from our to Smith, call and to President Chief

Chief and and Officer. me Officer, Operating Thank Fitzgerald, our I'm today SMTC's Executive with Welcome, On Rich gentlemen, Eddie Ladies Waszak, our is morning. good call Smith, you, and this and Chief Officer. Blair. Steve President Financial Chief

and the by support thank their would the continue business our want the trying work to stockholders pandemic. like again to I also team added our to dedication brought our chain fight patience I thank last for entire times. COVID-XX did supply challenges SMTC and against and on hard partners we for the quarter, continued As their with global as during I these operate

pleased our across financial are by a while that I operations the isn't we to yet. quick the recap, execution Before challenges to fight over want COVID all business I pandemic, and facet posed response note with the provide of our

activities prescribed the care beyond basic and Our COVID-XX requirements go by prevention various the are that agencies. governments health

stronger As and pandemic of the operation, when our is we forward profitable actions, and open us we these behind and look facilities and when and expect remain emerge to company. even our to a the remain result as ability to focused, in a more day

a posed track of to continued to pandemic. up and by expanded with as reported reported our in first the can quarter during the our $XX.X increased our Slide see quarter been the share. base dedication quarter address up quarter. the challenges revenue plans X, the and third ago, the to market the our on one was customer in COVID-XX from onboarding processes we million and prior Customer XX.X% diversification, for third our As from putting $XX.X to year same and customer million, adapting the million XX.X% $XX.X XXXX We’ve successful internal the sales end-markets demand

different, a be to planning, may little to market gain our continue a and sales require take expect processes little and we and share funnel. these perhaps meticulous longer While grow more

EPS employees business safe and our as plans pleased and as our safety to am share adjusted including generate the to and million, EPS During per slide sales million to put improving have adjusted the as we $X.XX their that of on continued expenses again us teams in XXXX, of line SMTC’s $X.XX market protect conference bottom action managing to and able development our and Adhering revenues of to our operations, COVID-compliant discussed were to expand funnel. on X. customers incurred results, continue the trust of third I noted EBITDA an or by $X.X share business quarter our an we expand report X.X% we us and by our enabled of operate carefully previous families. and calls, workplace that once health a $X.X

the from five million have awards bookings successful securing new IoT We during quarter, one Industrial primarily and customers Defense Aerospace, the $XX customers in in been markets. and existing third in new and

I suppliers. will for leading we of three-and-a-half-years, of and leadership Aerospace, over winning after innovative discusses are Measurement, and flexible, and tripled superior multi-billion-dollar the existing increased and customer of QX for four who selected evaluation continue develop as size quarter additional record track Steve the and America. our our CFO, I detail. you North why by discuss results software provides questions. and Let this for an business QX SMTC one now his year will satisfaction. some me to the year into award the Steve quarter successor customers our extensive and our for which quickly management, and remarks, our more has After our international of variety and Manufacturing to of before are his the share we in IoT, will preferred XXXX XXXX. dozens in supplier as by customer, XXXX. targeting our to its the to customer who we before his solutions financial current one the past with customers sophisticated a in completed leadership strategic first of of at because profitability Test industries, in and XXXX during which balance Safety, that will complex started COO Defense, Steve? be growth initial open supply requirements. third opportunities a pursue other results is provides with Steve’s decided manufacturing to Industrial with and many chain for EMS supplier in thank time of end expectations the products provide and including of example and guidance new just facilities Recently, involved global to a process Rich values outlook their of continue providers, Rich of role This two commentary ability hardware our products, search call Waszak, Medical also willingness we expected want during to such team’s were expanding

Eddie. Thank you,

XXXX Revenue to quarter $XX.X results, the million third Now on and can was discuss financial X. compared million, year let you me prior Slide the third the $XX.X from our quarter ago. in which $XX.Xmillion of a quarter, see, in

that quarter respectively. had customers of XX.X% the for and XXXX, we XX.X%, During two XX%-plus third accounted

noted, though this manage growth and provided we’ll strength and our that end-market pleased as by pandemic. share are we believe diversification top-line we Eddie market COVID-XX with the continue As to gain

gross of of for third profit XXXX This XX.X% or prior Our million revenues. of quarter. quarter the was $XX.X million compares revenues in or $XX.X XX.X% to

revenues at address was to with COVID-XX million forward unsettled $X.X million at-risk $XX.X MC profit of of non-cash related XX.X% amortization $XXX,XXX to acquisition or in-lieu cost employees exchange cleaning in adjusted The unrealized incurred labor connection COVID-XX incremental foreign intangibles, on for of QX $X.X $XXX Assembly, million thousand home, recorded of non-cash issues excluding Our and our of required costs, $X.X in compliance. was and comparison, QX XX.X% of professional disinfecting, quarter quarter third monitoring. prior reduction profit XXXX to health reported general $X.X million XXXX The revenues. primarily and XXXX. SOX adjusted XXXX stay exchange of in contracts. includes-temporary services gross gain related million, a care compared reduced or million gross for quarter to due in of the QX $XX.X rendered administrative our the and to to second relative lower of was the expense expense In SG&A Selling, was

of X.X% fromX.X% of of income market adjusted decreased of in net year compared in prior are million reported revenues reported after the in in income, XXXX in net prior $X.X income adjusted or orX.X% income adjusted yesterday. quarter of the QX third million same to$XXX,XXX in the quarter in million included the we gross closed loss of ago. percent a In revenues EBITDA third We XXXX the press quarter and XXXX, EBITDA third $X.X of XXXX. quarter adjusted year revenues, $X.X a In million. was Adjusted the million release prior of Adjusted in the of $X.X of XXXX. in revenues same a a was quarter in compared period quarter ago. adjusted X.X% the of Reconciliations revenues, As million quarter or million $X.X comparison, in the prior the of EBITDA adjusted ago. profit, same $X.X million, $X.X revenues $X.X to quarter and expenses we in net in quarter revenues and X.X% comparison, the issued of the of net X.X% a of SG&A to third SG&A and of of was quarter income the net year net

I'd Balance financial other Sheet for metrics key that quarter. like to and were third on reported Now, the comment the

XXdays, can QX cash-to-cash X, you on XXXX. our compared see cycle As with averaged slide days during XX

million Capital extension XXXX. a days, the million quarter expenditures the were at third compared debt was year California were Inventory Net compared second for to quarter at the prior $XX.X for lease DPO debt DSO XXXX the Fremont, in Net million quarter. the was X the of end operating million Both finance February XX facility in XXXX periods turns, to lease XXdays. XXXX. was same turns in our XXXX obligations, of was XXXX. million, $XX.X end and the the $XX.X X.X QX quarter in excluding in quarter. $XX.X QX of comparison, net million $X.X million include the ago. to debt, in In Company's approximately at $XX.X third of Third gross turns $X.X compared QX quarter

MC adjusted X.XX capital As debt-to-trailing-twelve-month was with was which our of our leases ratio adjusted in when EBITDA peers. November our Assembly excluding the than XXXX. significantly Including debt-to-trailing-twelve-month leases, September public EBITDA X.XX, company X.XX, in-line ratio, is XXXX, acquired lower we XX,

in able to exiting be We will continue further ratio we to XXXX. our that reduce expect debt-to-EBITDA

we COVID-XX ensure so remain flexibility the COVID-XX relationships expenses, priorities needed this revenues partners financial focused adjust we capital continuing to fixed-costs our and under over our recently further managing and continue covenants, that facility. pandemic expand, with tight as managing our can had Our carefully creates. leveraging and we covenant lending also pandemic quarter, the support our ensure end the during credit amended control working million $XX.X debt through to as our to on operations subject COVID-XX strong financial pandemic, available navigate flexibility, and facilities. we continuing through At To asset-based and uncertainty credit as of the

momentum to to assuming on current are expect now $XXX of adjusted end and of range noted issued at the and million outlook, and reaffirming margin We August and prior million sales higher at our we on $XX between $XXX between X, adjusted revenues million additional million and comments XXXX. $XX range operational Further, and long-term XXXX. thank in $XX and the and between and financial consistent between million to revenue cash-to-cash $XXX slide we to currently X, million, planned revenues targets the model. With we improvements operate range Based here's said, facilities with supply upon visibility, days that with $XX based and we EBITDA for planned As our currently continue the some as XXXX. revenue in move EBITDA EBITDA million our efficiencies, on XXXX guidance on continued expect you. our levels, Eddie chain to our range adjusted million business demand second $XXX our with expect for half through

you, strong quarter. a Steve. was QX Thank

the by COVID-XX Our working operations well and teams continued supply challenges presented around to chain perform exceptionally the pandemic.

through to moving see entering slides, the in to to certification will posted acceleration XXXX. continue Slide you am introduction following phase process, that customer starting new we into pleased customer of I ramp X. with If programs are product an that and production along turn are our

Over in and the engineering NPI, new introductions, production and Fremont programs. launched our Boston two last quarters XX or staff product successfully

Our to business five sales and continues customer. development new new multi-year expand QX million our in customer new with customers $XX customer and from in orders business one team

X, the market our focused customers IoT, Slide defense strengths, in industry. and key share supporting of growing aerospace we our on regulated on and to markets markets, that noted markets As the remain including medical play Industrial

defense During commercial quarter, offset with strength the which see continued space robust in third programs, we to some avionics. softness and

These grow by business stable solid our in We years customers. markets our benefited and profitably the from also a to a base ahead. provide rebound semiconductor

remain peer and together and As internal with generating stay including questions take the today. top short, excellence. the gross on our in being margin, we Slides are peers, leadership net In on among remained a focused and will our committed achieving position we from exceed are company margin to and for of XX performance and margin that, provides maintaining revenue we operational I focused EBITDA balance group, and managing to, illustrate, prudently progress among our service on plans. X of our a Steve, percentage. that call those III making track shareholders and sheet, We terms growth, EMS potentially, our deleveraging us rank superior returns that customer-focused very operational Rich on as Tier With

Crawford [Operator is with Riley Instructions] Securities. The Mike B. question first from

programs have new new about in you $XXX what new XX overall, Eddie with of months. orders programs? customers trailing with and Steve, existing from including orders But or million the customers existing with existing customers

Yes.

customers, to don't So Mike, really some avionics. customers like, so gone quarters, we build have come Those and I even years. expect to for commercial for maybe zero, some them customers back

systems $XXX going in some payment business that the right? gone And makes replacing system reduce that we $XXX payment million, have in where this as restaurants to not that's off that so People the is referred dramatically. in of to away. Same certain area, capacity states, it dropped million

But it's in XX% but certain showing to we're it if be being of than effective year, because others, more say normalized leading lead the didn't growth, double-digit I to, have that the markets growth. significant it's XX% would not in would So could a or COVID. we pandemic

then capacity M&A; if most And in prioritize Chihuahua, say, this expanding you Okay. another in important at pursuing your Southeast footprint or facilities, seems external to point? between, or Asia had at adding what of manufacturing or

Yes.

you we which our that expand in own. of because footprint these will we in Mexico our some awards just facilities, new So of referred to, current

We have of only We built eight XX acres. those. on

of and looking acres we with or should other are We do what those type what expansion. at X

in to that show expand. on if we expansion see up some now over our there's way. need time, facility, smaller a So will But going to at were you you'll

we more year Mexico our when facilities sales, sales $XXX million next do in year, Mexico. talk next our could Our over about or in

there, I'd to But as So obviously, there. Asia through if to first not maybe greenfield, a but looking in I'm to like would Southeast not some be. But to, -- we'll expand Clearly, actively we want I be at number Mexico. I'm one is point, that. get Europe today. where have look acquisitions not priority in COVID, to Mike. this out today, not we I avoid would for at be try and being

But current then number be to And number closer So probably I'd our hasn't excited be, one. markets and that's looking things would been clearly, come number say, or three. our facility two; every about across day to we just merge to yet. look us desk expanding different but there at M&A people or sell then do looking Mexico want them, would be We what at anything things. in

looks if is second based -- any it margins. out with you I'm expanded to for maybe the if you Okay. footprint, that have long-term in space X% the 'XX, should And some potential changes company. last year, at this existing exceed just on get you think with half what the the of your like be Chihuahua, EBITDA model And question the wondering guidance is fiscal then or where can of you you see adjusted have you to

Yes.

we then facility? first even facilities? I definitely me be But from But I Mike, getting can't at as there. touching X%. start over or because, little and Do if you we X%, As be organically that and year, Do clearly over or we we we in X% you're and so in to want Obviously, space, how by XX%? EMS X% be our matters expand. get that. we we disappointed pick it point let's move to expand more Can new do, up a scale do get so to you we'll a would bit right X% driven would existing if becomes know next on disappointed, expand the some with clearly,

much. right. Thanks so All

ahead. Capital with Christian next is from The Group. Craig-Hallum go question Please Schwab

quarter on here. good a execution Congratulations and Hey.

expected, growth It I'm it us last in in walk some in there your next strong is understand based that. you we been extremely wins of to trying your won in like continuation months? improve all Is COVID better we've of growth of upon expected defense the by environment double-digit As strong through that this year, gains? market new to the share that opinion. really just the market? to can aerospace that are sound going a that? Is kind look doesn't XXXX, XX in have confidence weakened the and businesses Or

Yes.

that customers of that's new growth So of be last we've Most question. XX% ramping not X-X the obtained that, up. quarters will the greatest if over that

announced some a aero announced defense We've had we large point, at So win. wins. different

we're early. Christian, backlog any And But week this than we that year of decided to terms orders we you December. second guide December, remember, or been to the in going up in So forecasts probably and Because most backlog in year we actually we early, if that's orders. better here since next in into the guide this or I've why guide have of through because normally locked either first decided year.

that's existing the in stay appropriate previous it I existing put or than we years. customers so believe this customers. And thought flatter new customers But to programs out. it will year was new with most of

aerospace of other I and avionics this the And some see year that business up ramping commercial some the programs. will back XXX stay away. don't of

and driven So new customers. by it's mostly new awards

growth you grow understand long-term make just that, this assuming there'll model into a future number? top is business just potential And that that M&A? an Is over great growth. line sure organic I Great. want I XX% Is Okay. the to XX% that. at Or be to then a could you over time time, that where segue think

organic. is of I structural we bit some to now, house will to and that Yes. good a said, at striking Right see doing hey, don't the our take here, our what do M&A. something us any let's question. in a unless we've It's be it. so have for XX% look But strategy, data a And XX% do

a we're QX, bringing on that in qualifications in of lot customers a think lot I on We're QX. of QX. bringing

get over by somewhere Christian, I look value gain that's a bring on. really XX% there distracted right want pretty and of couple couple I a some grow what's organic years clearly something Once on, don't but we But them we to sort I the to there's so out take would million we say of can And out of us. we'll without along M&A probably or see of as don't growth, scale. and be big the if $XXX while think now, customers significant some way. defined, you see

last gross my question do with margins. then to profit And Great. has

up time, for hiccups material at As ramp prepared some we the as that that programs doing next customer-driven to these we there you all how assume ramp same are thinking year, of be of a ramp programs are new should we could efficient? that kind be confident growth we as be should that? Or up about that new new we these you're

Yes. It's a great question.

the are keep flat a costs the additional but gross of I at it kill ramp to point program. our won't a will front think front-end that it tenths as normally, we to there So of up margin, probably end it QX. And of couple through program, QX and a down

QX large you're strong QX-QX customer you a add quarters QX, I a QX, point next efficiency. first never that day probably a and takes a normally it's couple profit tell get of tenths gross would So then to a year. that of you in in very couple up It ramping the on. to efficient

Private from Woods, The Investor. Craig is next question

going I'm wondering be do in this. Eddie, fast we if able we're to up? a to to if the If going it potential able on Yes, to do you this, expansion bit Mexico, are be could little keep need we elaborate do plans to to just enough do

of Everything we have that terms up, I've told keeping you plans for. in

don't there. in yes, any think up, I keeping So there's issue of terms

expand do so going everybody to go we give all so to we're But have here. to do In the we're expansion we how not that But, we're I'm point, it that clear at we'll prepared be today prepared. to terms will specifics. of plan, announce are some and Mexico to what going you in going as

question. have do one other I guess I

losing heard you on what about we we I now if replace be Rich. might guys. him. if sure that know that just potential And we I I elaborate If I if think is plans it of I'm of on sounds that heard I call I might last wondering any any this don't there you if was be. to have touched losing heard, And could right, right. I'm like might not you the on what

that reasons, right. and times has me. for No, X to Rich, is, personal X a over for you decided make and all, sad have first off Rich years. This heard XX been Me of change. on or very together,

And a kind so we few search for through which started have a say been on-boarded new QX, done. and to COO. Rich would get projects enough customers of he will stay our a has that the

have I so Me I and Like changes. X times through together. from this And Rich. But appreciate said, together. been that life worked we've Rich

I But to chance the Rich in future, that. to we move another do on made at hope the and this get point. has decision So

I hoping these search list Rolodex Craig, had a fix. use and list that through, old reaching a we QX of things them. in went made we talking happen I So and you work terminology, have want we're that the end and and out the to, started by of that to that to I if done through people the I've have have a

the be with quarter? first will entire through He us

At this point, yes.

yes. So

happen, unfortunately, with to not. But and I had like got you I last hope kind works glad wish feeling asked a going Okay. I'm I I'm to what wrong, it been of was my but I time, anyway, hate I of I that fears unfortunately, realized. something might say sure that out. be that. plans to deal they've looks

you've did So I'm you quarter. done. great the work of this guys real really here appreciative

The next from with Mangrove. is question Kohl Steve

fronts. we on First actually rare Obviously, they on easy have say hasn't to. when company know COVID through a to excellent different And off, going you been I want quarter. it's to that come an congratulate many all they're

So to briefly congratulations Rich. call out want on also that. I did

I happen as have back far time SMTX the guys I a look as well do I when place, different than Company the And a future think I best think it's recall was this they the can't have is drive to good on I But on, having think tirelessly guys to team. at now, his came the I people the And feel the I now. at of the Company. more And know think make importantly, as and this my worked on certainly to of you last or Rich the rest that I as wish you has in know. about endeavors. plants I where I point, think that along luck with Company when operated behind point I him them even

So luck, Rich. good

of I few a think I in I'm terms know, of as of questions, going you have always, to couple since those. a

of how how but about example? little have does see EBITDA about dovetail numbers, of guess you talked of the a guys plans kind EBITDA with And some has that in is that amount trying turn generation of couple terms the me of that to talked key presumably, the kind you we I little I And know for leverage tie level haven't and free of out. also Let our I going relevant. specifics, the bit that playing sheet. cash some flow I'm are bit to a Mexico, cost on of think the balance in of that into things. which numbers, some forward does One -- debt the to know adjusted absolute Steve kind about money. and going is a expansion absolute talked How the debt in levels. I leverage ratios

Yes.

this is Steve, Waszak. Steve So

pressure million debt numbers about through the of inventory more increase cash which on COVID $X.X been able in of debt costs through the last across constant levels So as COVID and had in couple year; the we've absolute to levels as we've some saw, probably quarters, you are through got our we've some constant. the and of keep well as

working we've So on that. been hard

XX-week collections our do leverage actually are We the we'll -- quarter prior quarter. watch each And been a have With been that, our so continue than daily. cash that. it to flows. stronger We little have

contracts So for We've has lot. terms the with around around work done we of good to bring in streams -- acquire structuring our or Rich some a on some good when materials longer-term mirror that have that's work contracts. payment helped of defense done some aerospace us these

we So all, all it daily in basis. on manage a

been see you been whole X quarters has in of history X can last this COVID or midst -- able So process. we've the debt constant in our to over keep the

at look right expansions about to look Eddie through and generating to and forward, terms look are sources towards uses as As alternatives that, manage we the relative that. we as in talked we'll what

banks, And we we the and about a between next operations. on and year, talked working something with continue light we'll XXX, the have our capital. we we manage that to constantly rapport put with for tremendous about growth XXX other how bright the that to So it's thing talk them

So relative to but don't more debt on mind, it to it's of an EBITDA continue constant will from EBITDA, higher absolute the perspective. top based level that, leverage doing having increase ratio that debt our And level to decline by to relative expect on basis. we quarter-over-quarter

week daily. So everything that's weekly like do else. with work almost and XX-week I in sense, at certainly it, we a do cash said, at. -- macro the And it, where hard updated we're and monitor We flows

new and right largely when orders, -- I it just get look did Right. not Did that I the was programs from new at customers you one new was versus I that new hear right right? -- just existing Eddie, it did this on get or customer?

new largely programs. new customers, It is

programs? new customers, New

Steve, had Yes, it inverted. you

defense a target know, you're as on? for today, a so something offering of mixing there what or X? hike of -- up. you have about to obviously, potential maybe and so are could we do it you those? being that the particular with go where segments market focus. But here, at the we, over areas or targeting some late guys and And you that, have avionics Are the see when being the Or look other you but do died some It's targeting, difficult talked provide you there can guys speak as pipeline? Okay. to things what next we are some in things out And how obviously, almost I you year I had color we that do did

Yes.

look highly types there's all work, of semiconductor, which defense, X a for go fall customers really and regulated we medical, general aerospace, and as markets Steve. pipeline, complex the into a have rule, we highly others; Highly capital for which those So above we and beyond complexity. the need regulated, also levels get things. And certain we are things. a They certain normal. those type for we need of and believe a They those higher-margin because that equipment, quality doing

types So sets. of pipeline And right customers. the look is strong certain those yes, for in we now

The [Canon West]. question Canon] with [David from next is

you do the just the well, future, Congratulations, I you to would I and great appreciate on Rich your And execution. success. in whatever like wish much wish impact Company Fitzgerald

those you're in you speak of terms on the to touched bookings So where in in but kind the bit quarter, little a the sectors of can you this, both strength? organic growth, and seeing

revenue. to strength of XX% aero X% seeing ago, were the be of We're at defense our that were we year, market a or zero. lot This grow. in year, XX% we'll Sure. years to I so. continue Two to we Last expect

the in grow to continue defense we'll aerospace market So significantly.

grow the us. in We to think that market that's us power we a that, excites for And expect market. also

to IoT, one equipment continue our in really look really division growth clean is technology, when X capital of new will existing added power one customers the a then that semiconductor One So that and industrial that And the market. grow. good customers. has market. the us We've was third you given at of

too. One landed-expanded a there. a equipment semiconductor capital brand-new is is and we've one customer, pretty significant that So win,

in base. customer in we're We're semiconductor equipment market. expanding expanding and We're clearly, So expanding and and IoT industrial power, the defense about the next where we're new our in pretty want excited the expansion capital But market. we to. customers year the in

that when say they're follow-up those one can't my looks gangbusters one sectors, now. right Ed, is, on going at So,

differentiated So appears is a that proposition it the just And the you if as as got and more value proposition finding customers are of please you kind Could and that it. if you're I'm gaining going some you've share attractive it that wrong, me, gaining and to allocating people that have against? correct customers but value seems business of what to up a versus these share. summarize you're though you're

Yes.

new the a think it and easiest to couple the off are new I share, about check It's if way gaining winning no One customers is, box things. gaining of it's we customer. is right? you're a doubt share really

gaining So somebody is when losing it you're it.

So we're excited about that.

our supply chain I and driven by, first flexibility. our all, supply chain think of

existing COVID, flexibility been issues flexibility. because we'd during have that not really that have some say, our we that done part had like flexible these customers And So have had. see hey, with of some competitors they the business guys who to their be to haven't our think have I of customers, and same people us, of with want

excellence. is chain operational supply So one, and

Each somebody we We the has And about it. come and they factories company in around experience. here. then you what in people at all and industry, have old have lot a factory now. through a leadership leave the team and do And of of they that like success, wins as companies been talking say, and end, who's business. us we call lot that go a are has new a to And great our us did company, our people hey,

operational the is, excellence because right market had So closed the reputationally more COVID, haven't of I taking think, chain, now, and supply business think winning we we're competitors, share. we because then last our haven't during down and issues I

rate question, the are -- right performance question. credit just should of seeing; a now, what In But guys this you're margins, want what Company your general the my don't And organic industry structure, given getting a what we're executed interest past. financial both multiple and What you're which Because hand, some one numbers environment? are such the now, on on your not good we're in paying, you in guidance, are that there well think seeing? public buyers out strategic think a a are market you've Okay. I seems last based but industry it what multiples monopolize. as -- is multiples sort you're that for getting growth, to low per that as general, saying of differentiated the sell company. not you you that not given execution in do on in then the

is most industry at times think the the or double X.X in EBITDA, board top how and the that value undervalued. to believe were But you me do discuss XX low question the X probably I of Yes. the the digits, times, clearly, is at so. This Company. people all get and probably true the I intricate There's time

I we're be valued. we somewhere and should or -- So X.X X.X think probably But be there. a not between XX X reasonably seems to

And a of digits that little happen. that than even year, other grown double frustrating. they a But back significant is now be so this say clearly, growth that organically be many in could XX%, COVID I'm I over then year that every And hoping think a couple growth, next and so. will performance it's We've they grew the year will of -- which environment, And COVID. the next our X% one or year double-digit growth not grew [indiscernible]. companies we'll year-on-year, XX%, year, quarters And there's on X%.

And to multiple low will a frustrating. But is out. get the true so I at think, little bit point, such clearly, a value come some

well, patient I have and you guys. a I'm shareholder, Okay, confidence in

not but like it to the just world borrow, way would We happen unfortunately, to that's the David. works. Thanks,

you. Thank Okay.

go is George question from ahead. next Please MKH with The Melas Management.

I'm to Good new the morning, fairly story. gentlemen.

the a to But that taking the do company and but one sort else? contract three a the not getting bit program, So programs I'm basic. these new is they're from new is other of where they're new it I are Or primarily maybe manufacturer or manufacturers going from anybody it factories? little programs, from customers new winning, looking questions for first have you're you're the to -- you

We them competitors. from our taking are

existing from contract? So

Yes.

Okay. Great.

why year. then high. two maybe I I'm And the quick next comment interest could so questions And CapEx Okay. the expectations for expense. on then somewhat by financials. your don't you quite understand it's confused on

let I'll Sure. Steve those. answer both of

X.XX% X.X% revenue. between run typically we to of CapEx, On

our year. next developing still plans we're for So

in comment days, specifically there we'll So we XX-XX next get yet. it the in. on We'll it lock can't

retired, CapEx, Term about X%. X%. we It's typically so been has in that ABL A is between that's LIBOR-based, expense, A X% sorry, on A, the And B so XX.X%. interest in new XX.X% I mean and what Term So and the of maintenance we then split on then a CapEx. Term the to on on range about Term -- on that is range X% of And between Term it's drive have B,

So on of we're blended some leases X-X.X%, perspective, that we some And in then are somewhere a that rate. have higher that, on top at probably X%.

range, We're in at. a typically for that's we're where been we've where bit in and terms in of at. that So range we're that

this which debt. So until we towards reshaping refi, we certainly look

of to lower in think go disagree we'll yet rate, we interest a interest are full that. interest instruments to get rates. lower stuff to continue for rates in a But can to Don't we high. things place today. we get this get capitalize How some like a to the rate? these look period we have it it's on can towards, to the there. We continue a terms But with We'll to be of at those you, ABL

this a that after penalty, that something within November consider? and you refi would basically can soon just the X% of you A is year, But

X-X-X. a really It's A. can refi the we It's Yes.

So at it's right X now.

So we refied it a period back.

So it every August, that X-X-X. into triggers

have it relative to now. all the to assets, X% cash relative right flow, And to our growth in range capabilities that to relative do So we and certainly, we're that. have our our to

scan both revolver November. times for immediately market certainly, we see So all it's our with and have relationship the work -- after But debt. the the to a it I both we happening something don't with term at tremendous

we the foremost, of then talk at this we important is capital, So and do is how as debt second, the we look the working to continuously to them about capital-intensive it which a cost well. manage first of Company, industry. because growth support And

Appreciate much. very it. you Thank Great.

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

Thank you, operator.

be great closing, in dedication of his the I to years, and to will missed. again last partners, we distributors support over progress I want have thank of reporting couple for First our stockholders their him and Rich day. business and he to want Thank a our you, our that to continued thank our as forward for stakeholders team, go to all, leadership forward. various employees, know let and once look

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

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