CommScope Holding (COMM) 9 Nov 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the CommScope Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. as a phone.

that is advised recorded. Please Instructions] this being conference [Operator conference to your I like the over would now hand to speaker today.

Good us Kyle Vice today are Chuck Quarter you Lorenson, and with for Executive CommScope's for President today's Investor thank Nisaba, Third call on of Massimo Results. morning, XXXX CFO. I'm and CommScope, President President Relations Treadway, and me to and discuss Vice joining CEO; and

that Investor the on find this that of uncertainties Relations will website. today slides filings could note of our our based our future can You business, future report contain Please and Please materially. that affect which and recent accompany differ see some view statements SEC comments the our identify actual risks performance. on forward-looking may our results current principal

call posted on our unless noted. our this rates and to earnings over All CEO, the I'll Treadway. discuss described turn we and Today, to associated which are more growth over Chuck today's to and in measures presentation have our described non-GAAP adjusted on measures, be basis, materials website. results. quarterly during disclosures Chuck, All are today's the of call during discussion a will items housekeeping other earnings are year-over-year a financial morning's turn will are contained in I materials. references in to Before Reconciliations few non-GAAP review. now otherwise our President financial certain or adjusted I detail

adjusted $XXX for of sales Slide CommScope and Thank quarter delivered morning, on of XXXX. core good net million core $X.XX and you, of X. third everyone. begin I'll the billion Massimo, EBITDA

Home corrections, XX% EBITDA macroeconomic customer by to continues XX% which sales year-over-year. down customer million by impacted of includes Networks consolidated CommScope, and uncertainty. year-over-year the business, Our we our and net reductions billion, $XXX of larger-than-expected CapEx reported down third lower $X.X orders, customer driven The quarter be inventory adjusted

meaningful have businesses rates and of third CCS and the our beginning year, previously, been in OWN the since no order quarter. experiencing discussed As recovery seen the lower have we

we the to timing we required. our and were of in in been into on to XXXX and EBITDA experiencing core they seeing our visibility A&S inventory we and adjusted XXXX have $X.XX billion. be our of $X project and next softer-than-expected half going the rest addition the Based this to post by disappointing rates In guide have few first more is A&S quarter, year The result a over development OWN, current billion segment. are challenges customers our third are in into Clearly, slipping we the year the quarters. that as order quarter, approached revising fourth CCS to is next a than look

including connectivity long-term on recovery, for funding cable However, growth, general government be upgrades. our we and to bullish continue market

We and recovery businesses a we are leader are in development. capacity well in product these to take positioned of have as invested advantage and of each the

understand true inventory work we better and impact business. our are about demand constant we dialogue projections customers While levels, customers with our continue business the on to with and to in

second we continue we we quarter As on our can control. discussed manage earnings to what call,

implemented costs been of $XXX reduction have our We approximately in activities have managing aggressively cost million XXXX. and

automation cost, These actions on feel aggressive an direct projects. further reduction. been opportunity include is have we and for cost Although savings further we still efficiency there material

basis proud XXXX. and of on incremental to these an defining by the first EBITDA $XXX of as the cost actions approximately quarter revenue a implemented targeting we I'm by working XX% are our improved end of reduction team's are be We control. million core focus on core what of has Despite the year-over-year, points. our XX decline of can in revenue percentage adjusted

update on an like you I'd to Now of businesses. give each our

has CCS to long-term world. calls, improve indicated significant strong country the in United other infrastructure tailwinds, we addition around commitments in including States programs market previous to broadband spending As

to take recovery in have full well the are place. We the advantage of as capacity of positioned suite we products and invested have in

also to is the for and have Build also of positioned meet the in the funding. Outside our by AI we the States business United government investments, centers. requirements on cloud America as CCS broadband the data of side portion We developments encouraged significant business of center data and are building the momentum the occurring

cost structure. CCS, in aggressive Also, have been we our with

opportunities still We substantial believe to cost We side. there that the are value cost a drive efficiency. we drive on looking at is that additional can

intensive. efficient Investment in more drive are that and bullish on remain these area systems performance. of processes We financial segment. equipment, matter strong we will However, with a time result timing CCS market tailwinds the CCS It lower bit further and costs just are a of in on position projects and cost as drive in will this focusing is efficiency structure more market. new longer-term An an of our example substantial recover. recovery. this automation. The a coupled this our recovery, is can of

to mix. The well. business continues perform Turning very to

EBITDA Our segment EBITDA LTM year. $XXX $XXX adjusted million up of mix is $XXX is million. The year-to-date prior million over

We are mix the transformation. very proud of

in business Our a game company. ability our for to cost base this leverage has segment. grow It the created our changer value and strong is

in X growth Ruckus continued [ product. we are our product new announced point ] quarter class Suite major enterprise offerings One We with third access and positioned the as well X for WiFi

Also, One private intelligence officially network Ruckus business previously, assurance across cloud-native public delivery products. dashboard. AI-driven WiFi we converged launched service an X discussed It platform, and is have management a delivering unified simplifies network our in and we networks. As multi-access

X functionality of As by mover first share as to the to we market the WiFi WiFi gain enhancements the are the in products, advantage launch a well taking of first of one X. positioned and

market continue increase share we those to of result in in believe by network certain our we We market investing can to systems a dedicated segments. go-to-market invest Finally, resources channel that and as in segments, to our products strategy. of mix, continue knowledge market and

carrier and phase. plan fully previous a the in in implementation developed U.S. in a capital we spend. have OWN, now are we In decline as mentioned We contemplated calls,

more severe these than and think in declines we are don't are However, we had alone I expected, these what sentiments. much

some second the carriers recovery. not in There a half, recovery be has this Although materialized. will indicated

is into this expect we similar time, XXXX. at what segment, of in the would recovery. look there of this at limited the moment, will timing the visibility we However, in to on Based see visibility lack that XXXX this

OWN ] we Again, to focus we on can in continue [ the control. what segment,

in have margins in EBITDA been have cost management this We segment. in in despite year-over-year results resulted flat XX% our decline revenue. cost aggressive of The a

continue develop and new products. we management, cost commercialize to to addition In

We previous discussed in the antenna Mosaic have calls.

are we steel in space. products developing also However, new the and power

where products We AMS, the will we RPD develop business. very recovery. segment a continue has new as well a market market transition are with to our R&D in are products, we in made Again, a we CCS, modules. edge-related and Finishing have feel will the similar leading to existing to positioned base like benefit supplement amplifiers successful of nodes, and supplier discussed, from including we

a CMTS DOCSIS as edge Although strong business of our ] phases in we the to early are continue X.X grow [ technology, remain we we upgrades. our of the legacy supplier

the we the a be as of and major performing. We positioned products with all cycle supplier well products best only X.X to player believe the the are are are upgrade DOCSIS in our

to the an XX the range. show companies Expo, with fees including product During Tech SCTE virtual product were achieved commitment last in this amplifier we In demonstrate FDX launch showing our reconfirmed CMTS days, able Comcast the backlog. upgrade now FDX just the on market. of range, X.X that the product strong behind our wide product with is This and labs. best-in-class and announced our demonstrations position were we customer recent our Many cable collaboration of momentum our the in Cable DOCSIS by

that saw Although upgrade we short-term on are performance. will third major we quarter, bullish the impact the near-term very X in developments X.X

our inventory Several need is inventory. to their customers informed adjustments holding to are that The us first orders they too rightsize and inventory customers. by short-term make much to adjustments

upgrade addition, customers on slower-than-expected In of X experiencing our their some are projects. ramps

rates will As negatively revenues and issues, quarters. these impacted be in a of next the result order few X

markets In summary, the return. will

well in to are will third are work markets more that, can position about This the with when We return, when focusing on to over to positioned our us financial turn quarter And we do things I'd like markets stronger and back. control. the a talk come put results. we what Kyle

you, everyone. quarter Chuck, X. good third I'll of Thank morning, and start an our Slide with XXXX on overview results

XX% AMS driven of partially and consolidated year. inventory billion, manage For decrease sales prior $XXX by in segments year, by A&S strong CCS, decreasing prior of EBITDA Home, lower but of aggressively XX%. spending. demand more the OWN, in EPS share, customers from capital from decreased a CCS third Adjusted reported growth. per mix levels was our offset the quarter, OWN CommScope by and net million $X.XX $X.X We experienced as and their normalized Adjusted declines XX%

For billion $XXX mix. cost CommScope, better have bit drive of year our net The as EBITDA from reduction decreased core the plan, and we continue sales of prior up favorable million a XX% adjusted EBITDA declined to adjusted than and held driven $X.XX XX%. we revenue our

orders the Core to quarter our In the a all lower decrease back we of $X.XXX and end As continued at XX% QX. are and CommScope we to in backlog of AMS. CCS, OWN levels. versus ended have decrease of particularly and experienced normalized billion, essentially backlog businesses,

normalized backlogs, order rates driver going the of to the As direct are a of revenue. result be

drop million business is with of the data attributable driven business. primarily of XX% TCS Turning our network $XX decreased now of center building and by to our on Slide to decrease X. was adjusted XX% net our $XXX sales in prior CCS, year, the cabling a year. million decline segment highlights from and connectivity EBITDA the prior revenue. from The than more Starting

from pickup seen they a see half. rates no meaningful second indications despite in expected have stronger that customers order our to We

to in order in limited the addition third rates we quarter pickup weak October. order In have rates, seen

inventory short-term customer on as medium- manage the conversations remains customers and uncertain cash. CCS remain long-term growth, continue to demand bullish Although profile and very

The of visibility, and segment, project ago. funding see the from customers EBITDA, XXX% and increased was versus XX%. $XXX prior increased EBITDA on improvement improvements. lower wait for million million adjusted LTM are primarily million, NIC million stronger XX%. in also LTM ramp revenues seeing Mix expect We delays million of sales quarter. by $XXX unit change driven demand to perspective, as of to Based Mix a operational fourth a spend. adjusted a increased government EBITDA some net $XX business current From $XXX $XX we the an ICN year year, by

worked these inventory. supply we temporary have rates of and In situation order is product This digest chain constraints declined. as their and a Ruckus, out backlog customers have release as

demand point leading other indicators our products. continued of to All strong for our

We feel positioned the strong products. new from product builds we our business prior share excited segment of Customers inventories. term. about continued the to to and year take in $XXX units. development, million most limit One remains are continue down that continue Ruckus half are across limited this well and second has decreased that medium Demand sales customers X our our We XX% net particularly WiFi indicated long OWN very Similar to in a not CCS, with inflated materialized. visibility. soft and working to and

costs, adjusted managed the million aggressively year. declined of have OWN prior we XX% from $XX EBITDA Although

The have XX.X%. percent to a at outlook us of sales remains EBITDA near-term uncertain. maintain year-over-year The cost adjusted as actions allowed approximately

we by decreased of revenue expect mentioned, Based would current and the on offset A&S due look lower project third similar million by revenue year fourth essentially visibility, XXXX quarter XXXX $XXX lower mix. this and which XX% product to we adjustment $XX prior quarter. would of would flat from in than that adjusted the EBITDA was expect to is delays. from limited net inventory segment. million very EBITDA cost driven be as to prior adjusted reductions A&S and year, sales However,

DOCSIS us the Despite of to to order fourth XXXX. the approached several to pulling quarter challenges, upgrade and advantage itself they about inventory impact back This our Also, the on impact the had quarter an as higher rates expect quarter, revenues. dealt During A&S early project large the we continues with delays. X.X take short-term cycle. levels position of and third adjustments customers our

virtual that We from CMTS. including are CMTS, the the all modules can only amplifiers, supply supplier products nodes, and

As is new the product trials with mentioned, customers. in lab VCMTS our several

During industry-leading demonstrations part recent were service show, speeds. our provider major the products of on SCTE

major continue well for at business positioned future to customers DOCSIS new and We X.X growth. are win

business feel business home announced the the during best of We for this combination we Finally, the in feel outcome quarter, the our shareholders. divestiture to this challenging our a and is success for market. positions customers Vantiv. We

with of us close the the the sales working forward We Home the or late $X look allow combined and as year million transaction of advantage net $XXX driven demand. will EBITDA from in management the Vantiva to negative as businesses in prior the efforts. adjustments scale across will million, $X result synergies million as X inventory units, XX% to from cost XXXX. to customer essentially Home substantial XXXX position of saving versus ownership Our Vantiv take were combination early a declining of deliver. all improved year prior lower adjusted by business well

Slide to on Turning for X cash an update flow.

the quarter, from we generated operations During million. $XXX cash of

well by We to as driven a as continue improved management inventory. reduce in of inventory decline revenue

and discussed, excess inventory we in are previously As supply constraints driven holding the chain XXXX still by XXXX.

value. just We are beginning of unlock some to this

cash are free ability revising flow delay $XXX it range declines, will the million million. challenges, XXXX, $XXX revenue to our to for and to revenue adjusted Despite our we monetize. As EBITDA

Slide structure. our for X on an and to Turning update capital liquidity

quarter, cash liquidity global We and liquidity in cash During the and over remained with strong. quarter of billion. $XXX our third total the and million available cash ended $X.XX

the debt During quarter the million increased In outstanding we quarter continued and for not the $XX the our therefore, quarter, long-term cash revolver our consideration our execute with during million. of and third our $XX cash buyback we balance. We third by debt draw no program million. did to of $XXX balance on repurchased ABL ended quarter,

we we senior $XXX of X.XX% due have of and XXXX. add To year, million notes senior the $X repurchased due repurchased detail, more million of beginning $XX of the the the Since debt. million X.XXX% notes XXXX

we net the required quarter amortization. term The with the company paid X.Xx. of ended of loan During quarter, million also ratio the $X leverage

breadth will for commentary prepared expectations across use some XXXX. I'm with of intend the capital the securities now our Going my forward, structure. we I our conclude to where to cash back opportunistically to Slide of turning buy around remarks remainder X,

as external very the remains our guide downward environment discussed, As by uncertain revision. evidenced post

our the quarters. you of Let of positioning over our guideposts me remind last few

On can As in second the for customers we our Fast assumed recovery in our modest orders. earnings, half strong in second forward indicating call, recovery to indicated quarter no customers orders our you now, half. QX. to second QX recall, a rebound guidepost are signaled our a the in

were recovery customers Although indicating materialized. second the half, this has a in not

customers. have we with a adjustment large addition, In experienced unforeseen short-term A&S

visibility. the cable The short-term we recession. a are most passive the our markets current of into across customer customer of remain is Even and position visibility evidenced As competitors, hardware in despite telecom, and challenge uncertain. inventories, some with lack build plans

However, We and very growth still are challenges are bullish medium- significant. long-term on short-term

core our $X.XX $X reduced have We EBITDA guidance XXXX to adjusted billion. billion to

Although similar it current on XXXX. view not is we specifics XXXX giving looks our to that are

recovery However, demand current this from indicate some would levels.

to our cost As CommScope initiatives. Jeff continue efficiency evaluate structure accelerating mentioned, including we certain NEXT

are expense approximately implemented of have million reduction actions. on we additional beginning since operating year, Although the we $XXX the evaluating still

demand, positioned we to drive exercise, this the of profitable implemented. have and recovery we have be gone are should performance. through the strong we with found As opportunities Upon we excited well

currently but to, capital used address the specifically to several maturities. our structure secured I'd debt basket cash like ABL address limited senior potentially We availability, could upcoming alternatives sales. not that incurrence our be have asset and and to on from maturities proceeds upcoming Finally, including, hand, our

call, our For comments will to further structure. with we respect not capital making today's be

these evaluate that, to alternatives. back like remarks. updates some will continue give for I'd the to floor we And provide appropriate we to as closing as However, with Chuck

Kyle. you, Thank

We limited. as not the the are cooperated of to half The and some not second timing of the the our recovery visibility recovery markets with challenges materialized. is has have faced in many significant

is alone as facing not this are We similar challenges. industry

manage control not and is offset aggressively to continue manage it costs, core decline what to we XX% a enough we in revenue. can Although

It We bullish timing. do is on remain a the recovery. just matter of

in in to positioned expected the performance. actions with significantly are recovery and and future positioned well recover, markets are leader growth we to environment for on taking current well the improved have are when we the do of products. segments invested the as We drive a we are financial efficiency, capacity in new our most Based drive

asset near-term we'll continue the will structure, on transactions. with open to In work for and line addition, opportunistic that, capital we questions. now And including sales

Instructions] [Operator

question comes James. Raymond first Our with from Leopold Simon

the segment with upgrades that operators demand the to for I little And as amplifiers it Great. announced, unpack that bit wanted will strong. a be A&S here. if seems have particularly

of a to got amplifiers in So high expect follow-up. I a quick bit 'XX. And better a business? future, second little you improvement the insight I'm half A&S think then at basically into segment level, now to sounds I've is and it how get by material composition like trying or that a of the the the of What understanding

Okay.

start good will saying to by with about where business I little it really bit. out the feel that a are A&S So we unpack we

think traditional are I our have lines, product You there. we out mean, still which legacy --

We a also, a X.X of gives lot at with the of without Obviously, interest we lot of faster but go to this extended. show, lot a any opportunity sales upgrade. DOCSIS that. we speeds higher there, made introduced massive haven't a We're a seeing

really we where going, way market we and supporting our the to customers are they turned Additionally, pivoted go. and was whichever

FDX able we So know, as -- were we with -- with launched the the amplifier Comcast. you

the option which nodes ESD business our our the addition in the CMTS, with is other portion have again, significant. them decides and as we whatever to choice support also in go, is that amplifier to there customer But And would RPDs that, to labs of the and say also now well. have we're customers. R&D, virtual I We with along

say the going would leading feel it's significant. our say not we like And business to exact But the on of business. we're edge forward. you the of of supplier the amplifier is part a our that details I going I So give would that. I'm size significant

just then as follow-up. a And

get and of wireless at a researchers are chain market market, to market, for XXXX in supply NIC you for in calling you're And I number third-party of fact market LAN switching XXXX? confidence market us the sort least to as decline exhibited the particular a in understand the Within your the the But XXXX. segment the strength campus help could not relatively small beholden after player. that that

Yes.

we're not think alone. I

are a we mid-single-digit as believe forward. of growth out going people think that well. I calling lot and

monitor we're it's digesting business, in lower are we that but distribution coming project, mid-single a we close digits seeing released We now, of when insight future the a in forward. of specifically in, order on, about and really inventory. this good lot rates and the We And are why that, inventories. higher confidence monitoring in leading and indicators the now the where growth the we are. right funnel. it's the feel a win gives lot We plus backlog really distributors see which we on That's us and going a

Our next Meta from Morgan question with Stanley. comes Marshall

XXXX, Simon to health when you the about you're overall question, first are question then QX on of just kind but or maybe upfront. similar the of that a XXXX seeing release of Maybe backlog and finding the quantum in just know just the you NIC kind I that of of with about how new is kind me, Second talk as run business, the portfolio. looking And of kind rates for strength asked whole? just environment beyond kind

Yes.

Let the deal 'XX me with question.

the about see order in year think I think there, to today we're recovery we're think look. referencing in in we get we in from are we of sitting when and order lot QX talked to QX. 'XX 'XX, sort And to full remarks, rates our a I where like I some have going prepared say looking

in least recovery second half. of that So the sort would at level of indicate some

business, But and of a actually architecture. your And RAN few your there's on to question the one business. our first part XG DAS an answer with the then the of mean mix think error -- to that business there open of about players part I parts we're other

as going, about our business, X, our of a Service. One also that feel of we with Network just networks private So WiFi on we side Ruckus side launched where I and good that's business. really the on mean, that WiFi

seeing we're But to our is specific markets. dedication we're growing our really train And We attributes specific resellers We helping in into what invested the what's market. from value-added is, in and specifically for that market those win returns I salespeople We we've and in our deep and real us and products market. the go in as or push. that We the marketplace. investments. our salespeople really verticals, believe develop target I really we're why we areas vertical believe understand these getting we're

we So player helping in where are. of really the And about small that's a thing we is we're market confident in other grand us things scheme the of share. terms feel

share look where is don't So really specifically technology are. and markets our but going, at market go where and where vertical the we investments our to gain

comes Calian question with next America. Bank Our from of

have questions. I X

ahead where their one competitive the talk you First technology the and you on I they're architectures -- AS. the about announcements and space, where talk talking they're of front? see distributed do Can we When you, in about way. different the market Harmonic, cable to the in of And CMTS are on your they are share. migration position to companies in taking AMS

on structure. like quarter, And now. you're going not more balance next question to update intend The it an about this you're quarter update Last you us seems you giving to give told how us sheet. is an us the

don't You an on changed? don't what discuss do update debt? we Why the to in down to What pay you order get want can it. XXXX

Yes.

your question. I'll deal of Let last part with me the --

continuing prepared an when the in we the work that. And in At referenced think we that. our continuing near-term to this I So we several capital we're have deal and time, update, let work alternatives to that we're through to people remarks, we'll with know. have point structure through

based a because address I very AMS, a Simon, marketplace position. I X speeds the And a that. our get we with on upgraded investment, product they in product interest can was question and strong would to sharing want about other X-gig-plus And our of if they have get us, customers talking say in to where major as Gen legacy are with without your today Simon's seeing have those X.X on with an symmetrical position we question, DOCSIS software, speeds

not us that network. really only our also us allows the to footprint helps but understand legacy position upgrade existing it And to customer's

you and understanding of several customer of as their because in with and our able virtual prepared their understanding CMTS. software think when our shared have about good that -- CMTS, works in labs our because a to their So of network in we're be you software I my how puts to remarks, a position their how that transition to and in we really EXXXX, us of virtual edge or at

feel good So that. we about

a them on to pivoted we there they our our whatever whichever of way choose were which supporting customers, Additionally, was path also was support in PHY to remote remote but our of lot more where to side, to customers the to for to go. our support customer DAA want take. to SCTE, And are and customers they appreciation we at solution, want MAC-PHY going we the go going, as a that ability we're continue was

next Notter comes George Our with Jefferies. from question

in could it's was a -- similar I you the number assumed big see in some about that, starting relief, input chain input the your I'm would you've a chain And also, COGS. think. you're I'd in pretty about tailwind economy terms curious a wondering input the big what goods for XXXX. cost here be be in your the if it's talk Obviously, of supply now. that business in so about the interested -- of context guidance is of it's slowing a then supply know costs I of terms overall And great. chain part costs. asking to supply I in if right company, then cost of

Yes.

cost the think coming bag there's mean down, that relative and in. mixed I seeing on a side, input probably are increases what we're there's definitely -- a are we're actually inputs of other some some that seeing. bit it's inputs little So I to

where in X we think our ago, than to years it costs think I are higher back general, if where go remain how back you input about then. were still, were we is just we should

the cost think I don't to us, input about we impact in manage the as XX as think doing. about or the And we've think we pricing major margins as modeling at see into to I how be any least talked expect there think margin. would we XXXX, for it's I before, we versus move changes really -- trying and the

So think it's mixed a I bag.

still definitely higher we're were. inflated. we It's than still where think I definitely

some but seeing pre chain of the challenges. relief, we are to We that not levels supply sort saw

the of it. mentioned price, of try I after then and to And to marketplace Got the opportunity to any in to situation price some try kind you go more mean, improve sort margin EBITDA here?

I we're competitively priced at this point. think

I -- be we're not pressure. seeing wouldn't So much price

just right say prices I'd hold what So now. right seeing now, we're

comes McCaney from question next Our JPMorgan. with Sam

This for is Joe Cardoso on Samik.

So just one question from me.

customers impact characterize if a of the that so, ACAM in And your to base? customer exposure enhanced from any if much -- form peers there. participate be any ] in Some way ENHANCE of your you how eligible program. Curious bed. participating you're of and A-CAM get potential recent would trying the exclude in in customer program? of Just of to base sense can enhanced [ would your participation in the space headwinds have highlighted seeing the

Can you understand restate question? I term didn't I catch in the didn't -- the the used beginning.

Yes. tranched opposed spending an essentially to the to seeing of where bed. be the as and out extension program program essentially can provider what the instead is the funding that original investments that that all customers, in for enhanced entails service A-CAM essentially, bead would upfront they of funding is with ACAM The essentially participate

indeed, So know if therefore, customers have are I that taking you guys a pause in in deciding to if don't they participate any expansion or want

now. that answer way funding our it to [indiscernible] way of what we working with we're specifics -- is unfolding. would of dialogue that is, the customers I they think permutations And the that's still we us, would right the about don't And programs we that around do. requirements in the have think and understanding with There's We're that's think for any see relative the I do about constant we're that -- can we lots I customers. and can that what the

XXXX. I awarded And a the impact business going that 'XX, is is start add the to from the in expected getting betas but comment we that $XX.X and see at would small other billion will in And to more the that half states program ramp revenue 'XX. that in of of large first are largest the

Our next Nickman question comes from with Deutsche Bank. Matt

I X, Just if could.

then just pausing it varying First, OWN, I asset middle through I'm press may wondering next a sales, is you CCS, the Chuck the as minimum at fairly have on there commentary Kyle, across know you all on of a is that Or some there. secondarily, visibility. maybe, out of uniform A&S? something been everybody potential option, year? evaluating. be terms reports or at referenced in And

there's additional potentially terms color wondering business up you Just could monetized. if in what can pieces offer of of the any be

Okay.

the So of I'll part question. take the first

we the we're with think And is visibility of think think in customers, I plan. across level to understanding have dialogue of I where business. the business lowest the trying constant although OWN true about and think build we segments, as I our the visibility get CCS in their

think that at in not we're challenging I in alone think position. this I And is time. point

the see yes, levels. what in to backlog. lot and to channel of rates. adjust side that leading of seeing going little mix pushed metrics But a inventory of talking look a we're that, as have that, now, the again, partners think where through into lot are we're and mean, A&S that winning business, I I we ahead in And think term of I believe at is are as I They're the think the customers we bit actually lower we business a products then we've and partners, again, some digesting product. visibility into release the of we have about their a lot feel what on the they we've channel 'XX, And we that we some the talked some of the challenges major shipping funnels we order our we're short as mix. move in business, nature

the I probably OWN, most and So think, we the challenges with CCS think places visibility. that I have the are

to comment going not really on we're mean, I that. question, your of part second The

identified deal think to this the sales for we've -- I going capital in structure. say. think a us asset all to with that's I that's point have that time, And at possibility we're are

question Fox comes Fox Steven with next Our Advisors. from

After way just given if and to sort cyclical is you like was actual for what said, the question, over of like that business seems there's compare the to disaggregate be challenges inventory on unfair but I an enthusiasm any the CCS cycles, this especially and government things. funding just maybe just prior Chuck, owned curious, impacting cycle from what might correction

there overbuy, economy be us an to ballpark when them is had about on been Yes. personal I we're in will I a the the SKUs. understood what back to going we of obviously visits was trying you we be in about, working it, the And back SKUs supplier turns related ask learning need of to this rest on. customers, could a in similar get specific have major produce to better we're it that if talking to buying because can't really understanding that where COVID. would not with help type with it And produce number. dollars, saw you offices customers really you're turn want say because their we I've percentage what thing the to with We're what all and I our we've the of XX%-ish to be terms and

need teams we've their on next been the to confident to build going going to is that forward. help be it to a feel relationship a plans, them but -- in level what and we're of need detail, going So that. together understanding in supplier going have think better at and they I lot working inventory that us working understanding do are with and hand. their they that they're we our

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