Iec Electronics (IEC) 28 Nov 182018 Q4 Earnings call transcript

Greetings, and welcome to IEC Electronics Fourth Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the presentation. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Audra Gavelis, Director of Marketing and Investor Relations. you. Thank ahead. go Please

calling for in. you Thank

this On President have Schlarbaum, we CEO, the and call and Tom Jeff morning, Barbato, CFO.

rather statements Before and and these number regarding to the what or future take statements. These of Safe concerning limited XX-K, I and limited expectations different results, during Company by may sales, the information, or be forward-looking would with Company's a as describes or to publicly are made this will statements statements, other of historical not of Please initiatives, be include strategic statements or and in or recent Jeff uncertainties a call started, will results except reflect include by Company's the our conference to the turnaround results most The anticipates the future any undertakes forward-looking release future to Jeff. over to certain upon This but not call Company and Harbor turn the operations, implied reports Reports the but backlog we I other The read on statements capacities the statements risks update expects operating whether statement. such new to or and Company's statements. Form XX-Q as are Schlarbaum. Commission. ultimate otherwise, future it and of the dependent contains that as to forward-looking and of similar Quarterly not risks accuracy Annual believes, deemed all on no a any are our the occur get required moment that issued prospects, than current now events call Securities capabilities ahead, call, go filed guidance Exchange is events. law. those financial and efforts, result these earnings other like statements on as based Specific set when business but in Form expressed Company's to performance are that uncertainties cause Report this and or may be actual forth on following correct obligation fact forward-looking

and Audra, morning, good you, Thank everyone.

I'd begin, was moment American strong joined where President us Barbato. I Xerox like Officer. a proven a now, XX-year to Before introduce us previously Financial of Tom with recently He a North addition Operations. Senior to and take career, as a Chief with he President months Tom most Finance as enjoyed to our has few be to team. serving already is he for Vice been Finance, Tom and Vice

to welcoming So join him call. his me please IEC earnings in first

Jeff. am happy Thanks to I here. be

reinstate time to which in and fiscal The organic profitability, improve these strong efforts XXXX our phase asset now included reestablish exciting fully to growth. fourth and our year and characterized our sustained are by significant backlog for profitable is past evident The success we growth. results, revenues quarter an drive is efforts our increased of growth. management, and Company, we This believe have turnaround years exited as few positioned been have

to at over the in that XXXX. years level back IEC XX five backlog fourth level million, During saw million, $XX.X a the fiscal achieved revenue fourth mid-to-late our quarter, the quarter a we haven't years, since Similarly, we ‘XXs. of dating backlog hasn't $XXX achieved in XX of was September

high as we Throughout complexity into fiscal levels and confidence, on new making XXXX, to this leverage manufacturing strengthening operational excellence, well our offerings focused sales opportunities excellence contributors customers Our were expectations, new our to service customer as our and we focus restoring continue customers are target onboard key exceeding the for expand confidence existing continuing vertical operational markets increased to happen. capabilities. on seeing and grow and By programs ones. from right all pipeline delivering and to customer specialized,

customer laboratories, metalworking, service our our our to our IEC solutions, service a upon target continue longstanding offerings interconnect our a and scientific have assembly relationships and success provider We based to electronics a for customer base. as reliable precision our partner position as leverage full manufacturing we

XXXX XX% a During backlog ratio fiscal of We as fiscal fiscal XXXX, solid X.X:X. including fourth ratio of as of as to quarter of XXXX. book-to-bill growth year we XX.X% compared well fiscal the delivered achieved XX, revenue the for prior an in September year book-to-bill X.X:X, increase

or customers projects In fact, with current has while customers, not doubling business. have been we divisions us down have who for continue previously IEC we to driven on awarding growth affiliated not other upon customers add believe with areas locations we much their are In our by our are to commitment effect, of performance our new worked of their for we been based before.

integration As our competitive advantage. strategic more customers be increasingly to and with differentiation vertical capabilities our continue to seek outsource capable fewer a suppliers,

And wins a built drive the have as aerospace of well with as increased as up. $XXX,XXX due industrial XXXX from in new an a existing important our to the revenue foundation position conversion conversion. towards the increase saw customers. to solid customer primarily we that defense by in and of programs. we driven new opportunities and that decline largest over increases We from believe the programs, volumes which was sector to existing sector fluctuating a several growth our new have growth And at funnel for sector programs several customers are volumes medical an fiscal and growth believe existing The $XX moving market sales through from customer sector existing of million, looking program we beyond. to XXXX, and strong sustained move due The medical we conversions are saw modest of fiscal target growth ramp remains well million as saw as of continue $X.X

onboarding to the ongoing challenges component new as global As we continued as well related when and look margin early to anticipate XXXX, programs. pressures fiscal XXXX shortages we typical

get we for performance continued our in basis efficient material we to environments fiscal However, whenever we as even quarter mitigating XXXX resulting challenging management downward more executed fourth remain Margin XX to and complications on effective onboarding from focused meet staff constraints, can. points, and and improved though experienced our additions, order we by these challenges and of pressures wherever customer demands.

XXXX decommits discussed continue supplier our quarter to As results, late component instability global in the in deliveries. we fiscal result third marketplace, can in unanticipated which and see

continue orders quarter, needs. of are a our During managing we We workforce inventory the anticipate irregularities quarter, meet with focused on our clear supply throughout late while fiscal not chain it to convert these working to fourth components customers in making XXXX amount parts did mitigate and shortages to until significant more to customers' costly that effectively risk. our and the will XXXX address fiscal also

We extensive the culture life-saving key curve efficient, a can We so the process some products that operations learning Company that skilled and our continued Throughout requires to growing for we to we XXX place the in manufacture high navigate in XXXX, manufacture, first. growing the new employees demand, time. take employees and our strategically to manual demand. fiscal to complex backlog. over which factor in the especially challenges, and to highly Due order critical meet right become is is new mission these quality fulfill onboarded we training resources products, supply of growing quite have mindful customer our have engineered comes

has onboarding in timelines. programs process acceptance it to a addition, required well new controlled the of the can customer In discussed lengthy efforts been past the as due be development the as

our QX typically any new programs, for compared XXX, of we Company adopted experience normal QX We quarter accounting first slow several years. XX/X/XXXX. time new As historically for us typically quarter we in to seasonal as from notwithstanding several XXXX. as recognition will a we we fourth standard and fiscal strong the in with backlog decline we revenue will impact revenue This expect believe We declining have our deliver we the revenue expansion. up quarter. With ramp the as margin to is Furthermore, anticipate continue first double-digit engaged to today, sequentially not development our seasonally with. see potential ASC which effective to that visibility been growth experience

as growth already has partner of much reputation our following fiscal marketplace seeing drive in the to of believe In value improve. as about and the quarter fiscal the manufacturing the diverse, years, our by are we the well-positioned to reliable sequentially fact, XXXX the first for fourth and opportunities consistent revenue continues excited quarter to the We're capabilities recognizes last integrated as as two vertically a year. declined from XX% we consecutive are

to more performance. Now go to I'll financial fourth turn Tom our detail quarter regarding over Tom? things into

and XX% million, to of a as fourth quarter of the XX% XXXX for of of increase fiscal increase quarter XXXX. XXXX Revenue the Jeff. third an to fourth of compared was Thanks, sequential quarter fiscal compared $XX.X fiscal

at programs. aerospace and fiscal market XX%, and aerospace of driven fourth programs of by quarter XXXX, of defense saw with in The industrial $X.X distribution sectors a new sector XX%, and of our net XX%. medical and Looking of defense of increase million, the primarily of revenue we growth existing

growth to an previously from same $X.X year. the demand medical of period our reduction prior demand demand increased fourth million the We demand of customers, strong by expected well whose as where to been existing in quarter increase see continue from a with temporary reestablished the a hold which accounting one sector we from customer quarter, in customer. previous had in the Sales offset another the as fiscal on in million to compared Related for $X.X increased customer one relationship.

up the fourth in medical XXXX. in sector fourth million fourth of markets of customers. $X.X was decreases to $XXX,XXX to The sales due The per product. was $X.X of $X.X $XXX,XXX compared profit the gross primarily fiscal XXXX in million margins excluding higher due of decreased quarter the amount from Gross offset Gross deferred fiscal of comparison that for was continued $X.X fourth sales We confidence of tax X.X% the one-time tax was of adjustment modest fiscal periods. non-GAAP quarter million deferred fourth fiscal by increased tax volatility in whose the forward. quarter future million income $XXX,XXX to recorded or by increase wage to sales income in for Net XXXX. one-time utilized quarter points quarter customers in related XXXX in fourth Company's grown XXXX. fourth expect per other percentage as $X.XX of allowance $X.X Industrial expense primarily increased from have will the the of income in to and a increase $X.X Company assets per of asset XXXX. and increased Selling On included fourth million sector net to margins demand X% to of XX.X% fiscal share of new profit of related as or compared some in a Company's in $X.XX XX in the the was basis the the expenses. reflecting basis, to demand fiscal net administrative gross and income quarter QX share benefit, XXXX the of of the quarter a net to a fiscal compared quarter expenses share. going end $X.XX in several million or be

Company’s the at XX.X% and $XX.X of administrative expenses XXXX industrial or increased and sales XX%, with a the fiscal at Gross or Now fiscal the by the to industrial prior Selling sales the fiscal the or recorded to year The and wage expenses. compared defense higher million $XX.X increases was in medical income XXXX $X of in XXXX decreases a in from non-GAAP driven a offset income in excluding of of to compared in resulting XXXX. basis, in sector. $X.XX primarily to and year. million million deferred took fiscal primarily of sales income a Net net gross XX% million the to in from the $XXX.X XX%. increased and previously million XXXX the million, XX%, $X.X XXXX. XXXX XX.X% sector quarter aerospace one-time benefit well sales expenses allowance, our of million fiscal $XX.X the of in in Revenue on for due results $XX.X an decreased million fiscal Full-year margin tax AMT result aerospace and $X.XX Jobs to was to QX. of allowance first release as adjustment year. increase XX.X% selling prior million partially Tax or $X.XX $XX.X profit net the X.X% share. $XXX,XXX increase benefits, included tax was million or income the of administrative sector at Revenue or $XX.X Growth and asset distribution fiscal U.S. XXXX December by per share place per valuation of which On to $XX,XXX million XXXX. looking approximately increased and percentage fiscal for in credits fiscal of full for a medical discussed $X.X at related Act, Cuts fiscal as the $XX.X tax as in as as of $X.X the share million net in was to compared

at looking balance our Now sheet.

capital Our with equity. and strong balance working remained $XX stockholder million million sheet in $XX in

to at XX, You million will $XX see at September inventories $XX.X million compared XX, that XXXX were September XXXX.

we the as fourth levels prepared directly execute inventory we associated we’ve ability on on convert increased In our orders. to to had our with calls, As inventory backlog. quarter, prior are discussed our

a some $X deposits. customers component is reflected it of seeing our I'll With which impact help that, of of customer year-over-year global increase to We in the Jeff. to are the turn the shortage, willingness in mitigate million back

sales and life-saving and allowed the customers with diversify expertise from Thank for the year vertically critical a shift, combined both in existing advantage for position exit increase for growth programs. and platform. by have our reliable us a diverse, continued an growth and balance our and improving our we we to high fostering activity Tom. our for partner in drive We to when revenue focused growth double-digit support seeing driving as our competitive We're new begin to and phase are consistent and believe execute robust These we on operational us we're to marketplace pipeline providing Great. enduring a programs new us mission growth We energized strengthening customers. and turnaround existing and With manufacturing and position as significant strong number in three provider and we're Fiscal a manufacturing leadership a focused products. phase. create us, remain capabilities We believe our excellent of initiatives; backlog on sheet you, profitability. growth, this sustained was complexity key also pursue relationships XXXX fully of customers give the reputation solutions, our excellence XXXX. integrated fiscal position solid

with to working of industry-wide the solid remains chain improve will capital to supply we higher to the to flow. methods and free goal Our and levels optimizing generate look balance our continue counterbalance, sheet component cash inventory shortages, of

look on means we're allow We are which anticipated continue focused to to will us implement growth, also on ensuring we support shipments, like have a to levels. ways than With increasing convert at times we customers carrying inventory demands. right hand would and to that our improve that continue to inventory more orders our we for to our revenue business initiatives inventory we

headquarter quarter. We our occur continued new planning and to facility groundbreaking expect with in to move of next forward the Newark

upgraded many turnaround we've the continued and support to broaden improvements operational customers’ of a as exact the evaluating the business gain In needs system, that capabilities maximize in to ensure our these process phased growth. we addition, a while improvements ERP transitioned our not changes our are timing and period, we marketplace. allowing rollout to new to do Throughout are traction impact carefully to achieve us system our we we of excellence, an made

the with growth to a our life-saving and highly foundation robust our us manufacturing and continued products relationships success all of pipeline, and complex customer growing longstanding mission a solid Company. for Our expertise critical backlog, provide along in the a sales combine

continuing are us to for move anticipating growth through hand I now to that fiscal focused front questions. exciting it will be over are that, as further XXXX. With drive operator we any We the opportunities on what in to an and back we are of executing the

from [Operator Herbosa you. question Thank Capital. with of comes Instructions] Our Christian line first the NOBLE

taking Hi. call. Thanks for my

a think lot a had do success your a there? you've is you've you lot Or So in your year funnel? feel exhausted there in Do of you pipeline. business opportunities attractive lot out more new of sales still opportunities this

lot pipeline. we've our of in question, Christian. sales Great exciting opportunities Thanks. No, got a Yes.

Our a those bringing philosophy more we're and that than into customer represent maybe is where customer, of on new we're in on we to scope typically business about growth smaller bring quantity customers new taking on significant start, a quality we when so a reach piece operations. their it's opportunities our as but expand

of we had pipeline same and we've So in others our done an that job customers potential long-term a growth with that potential. excellent onboarding see

Okay. Thanks.

So there specific particularly is opportunity? a you there's that sector feel more

that the across aerospace sector. sectors coming the main is and medical really and focused three sector, complexity which it's defense Frankly, on, we industrial continually have the high sector,

coming of So all honest. those really sectors three from – equally it's be from to

Okay.

would XXXX same? be the XXXX, revenue So forward will between in sectors going say in you roughly that breakdown

and three represent I at of that still defense the anticipated percentage of next the the would sectors but our are the all and anticipate expense medical will largest industrial will revenue sector sector a sector, grow to larger percentage of defense be our our year. sales

Okay, thanks. Thanks color. the for

Absolutely. you. Thank

Our Maxim. of Nehal line Chokshi next the from with question comes

Thanks taking Congratulations. questions and for excellent the Yes. results.

be say So to past growth XXXX thumb year for so, end XX% year I represented XX% at I the that years a about backlog recognized. to prudent of guess that of year of aggressive? fiscal for too that – fiscal it at or if has for your was or would would fiscal the utilize typically five look Would be the you rule

will the an based towards unreasonable all hearing get the of we of ability I expectation execute reservation anticipate into and side. I component that our manufacturers to partners demands continued that we more would That customers XXXX, in Great expectation just a have improve the percentage My have. execute but that only go and on fiscal that improve, question, the order from to year. precise end our the only our light as Nehal. think of what we're you the we our and is difficult I to don't therefore, next on as that a it's ability is experienced shortages so little We a other that temper give supply candidly that's will greater backlog answer, see to uncertainty it makes bit. also

that that? what expected And within million, ship give you XX $XXX that usually to is you Can Okay. percent the next of months? of provide

$XXX roughly in see Yes, we to months. ship of that next effectively million XX the

And calculated gave you that given think of so was I bookings if which I XX-year had great. million. in you probably of around then bookings a your Okay, million, correct. June $XX think was X.X, your book-to-bill record is not that clarify – quarter $XX And the high, I

did in represented environment Q-over-Q you Q, is to of June peak softening So have of question decline have having was Q quarters relative because prior to I the the a of screw that a a so a as orders the due that demand golden the local result orders, or that June problem?

question. Great

solid X.X:X think I we the Nehal, saw QX from frankly down obviously, us spike. in QX think quarter but bookings a was – another QX I So represented for

think QX. year. to perspective, would from the to a the spike that is customer that out versus been I some QX timing we book-to-bills Probably were of in so advantage And the have able experienced bookings in expect we saw that throughout spread may reasonable we saw take a more that in QX,

this year. see past But how continue we'll see demand as we've I experienced bookings. solid think the that's our from So to customers I

anyhow. then, think the you cover And question your narrative, didn't ask in quite it, Okay, I catch I just this but I'll did so great.

December what stronger quarter typically it guide Q-over-Q. So you than for and the flattish have XX% see Q-over-Q much you is down that a

the the new pent-up sounds programs screw correct? result it from it's than quarters. of a like problem a golden from of past that demand So satisfying Is rather ramp

somewhat of combination that exclusive a well not To increases customers really the ramp new frank, to existing both. a volume just combination it's down. from program We're It's are of seeing be It's two. seasonally ups. as

reason increase already bit that? for DSOs was what's little up Okay. when do the inventory receivable And than accounts a then calculation, you the in usual All addressed. right. more was The the

of was significant had We of a when the in our due shipments shipments primarily of revenue place. the the place to timing taking took QX. It quarter and in amount September

I as you to also in quite table the to Okay. able payable guess, you spiked And partially well that inventory as terms up accounts that's customer the and actually also suppliers? financing the the significantly your presume deposits increase noted. the were increase then I

payables focus That's have significant successful be suppliers been been with in will of and a we area fiscal in some to focus terms XXXX. our increasing and area continue inventory a

cost Okay. per higher And unit? at COGS of the does that come

No.

right. a approached presume announced guys finally, your of good key seems well. guys one. you peers, a significant All it Okay. interesting. wondering one why SMTC, the did pretty would you acquisition were then I And acquisition. Great. that It not they find like as I'm about

say would area as at the of value service we're high I really So that EMS look we and the focused Nehal landscape, the marketplace.

of And investment so when customers. and at attract have, capabilities the more advantage poised customer the our you laboratories, scientific we're and of that new to vertical we demand the vertical look take really integration,

so And some unique customers. views of is something along service and comes those best really us of it our just strategic meet our how long-term to differentiates serve doesn't that offerings, and unless

answer the So best that. that's way I guess to

answer. very much. Thank great a you That's

Nehal. Thanks right. All

from comes question B. [indiscernible] of Riley. with line next Our the

projecting Thanks demand first on of And slowdown flip the end one any in quarter-over-quarter side, you up. taking my growth, market quarter in Hi. specifically seeing for for seeing question. particular XXXX you've market? flat any are end to being got single you any driving then Are

particular do that any So markets? you attribute what end to like

the main solid. to any one we three major continuing focus any them. remain seeing not us We're markets of For downturns in on that

we that think serve. I demand the three across it's So just sectors solid

weight moment. more the carrying other than the really at none So

should come you in much Newark, you. expansion more to current with expect think capacity how about Got then line? Thank then do capacity And how and we on it. the

question. It is capacity depends of an work, interesting on Yes, largely the right. mix

we're with Other higher capacity. be they a impact volume have can complex, products ASPs a But different available revenue lower volume can capacity. very capital asset significant generate on from lower in very will that perspective, nature. work high in and Some position a solid with be but

is the really increases, perspective, CapEx Our workforce have demand technical and we volume. higher provide as But capacity. available proper levels our a that of that manage is to we’ll plenty view of onboarding the expanding from talent challenge

Thank you.

And about? can Okay. quarter you talk that the during any then wins notable is there

really names don't confidential. announce Customers program private customer and keep new that and We details. we prefer that

So and is all XXXX. we our a a ramp to bit revenue we as I quarter new more of fiscal we say have fair anticipate fourth can increase into that, in of customer those new customer volumes move

it. Got

just and higher at the year-over-year winning are transitioning Okay. to And you margin that programs? programs improvement earlier would higher attributed do efficient margin, more year in were like sort then to existing you more or attribute looking volume this that production NPIs more to of gross that

I the would it's say really former.

so learning see think we downward new offset We're those we'll that you on which XXXX, curve we phase continue bolster of As think volumes were in through. you late QX board any the and sprout planning seeds in in started our and that increase revenue a just program we starting onboarding, weren't go to in pressure and partially new to through higher last issues true and we absorbing lot that benefit we put to early of a help margins and if year business the development bring cost the that about XXXX, – will on and the of and see seeing get I just we're of were lot of saw because margins we now volumes. customer that

seeing last then Got improvement And it. an customer Thank question you. for year? me. overall compared Are in last to you concentration

sure I'm what Clarify question. is. your question not understand your I

relative there to is customer like XXXX? a I reduction concentration mean in fiscal

this to look XXXX, new XXXX. started in being moving I the customers I XXXX ahead, at on needle come in we weren't the and revenue period. the see in that movers needle at past really fiscal a are year year XXXX board and see we of number when to Well, look continuing That

these we're brought addition with up, board. up as starting we ramp that the the progression of that's to slower customers on complementing driving customers see as a now existing it's them bring and to programs the but in they winning what's So backlog benefits really new we new

Thank you. I'll pass it on.

Thank right. you. All

comes with line next Our Hirschman question AIGH. the of Orin from

on How the Hi. you? here. are Congratulations progress

you much. Thank very

new the question, really perhaps wins, medical continued one of prior to in additional terms the on to are In albeit it's like defense. sounds the electronic and I'm more but industrial repetitive there is are nuance it. your almost going space, add of set manufacturers? of a so, an capability within certain contracts, compared aerospace, you where or And wins that good winning portrayal? Is other to specifically It accurate verticals business there those if then capabilities

of have demand a customers array greater more outsourcing continued smaller, focused suppliers. to say a that on their capable they're Our volume of to

a we're their of outsource then so operational benefits the And greater seeing solid of execution, consider IEC for work. which is inspiring them percentage to

growth. the obviously the day work, how some greater backlog you which customers led at of unique capabilities, in end benefactors to the our for of performing of combination, the companies And that the XXXX, share perform. their it's think but it's that a our we’re of win a I are but

verticals, wins new and aerospace it it or is the than hard industrial to of that way? it's the the with stronger medical even terms is the say to Within say fair in

No, candidly, three. amongst I say would mean, equally it's spread equally it's just I spread. the

newer really weighted seen wins. in haven't overly any sector We the one

showed wins can revenue we're coming from seeing I the saw what are as greater it defense aerospace, But distribution we wins from, the – where all side say up in and Now XXXX. three on sectors. across volume strength the the in

terms it though have moment Does if Or enough so, in are, Is that just in mentioned pickings because across? there does have can a you hands really you “usable you as shortage affect Okay. tons terms way? And of like trained. enough in well people capacity” contracts? capacity And in you trained get of doesn't are things the at how give smaller you? particularly aren’t overall of effect needed there if that it this on industry, better deck an you that

really back it question. former to get. question That's work largely our and driven When capacity, an we the of mix we sort interesting of the look by at

electronics some depending assembly put capital. – much and other broader the be of programs work there's work less electronics staffing pressure the automated array then Some can require right. on And demands, lot on of human a a of the that architecture

us for requirements needs, as we right in it the on sure onboarding process that arena, that for not the So just doesn't volume since pressure high workforce future. making high put technical of staffing and it's much skill today, as have training rather volume the the through we we're develop

Okay.

ask progress. other let congratulations on me people and Let the

thank much. you very Great,

next of Mark is Boyd question Next Our Capital. the line from with Shawn

hear Good you the on morning. quarter. me okay? Congrats Can

I yep. Yes, can,

Did you business you the is or quantify cost how a in shortages September component Right. quantify quarter? you can much

as alluded as because that it quarter, issue. prevented you with in white from by AR of for customers shortages us think at It isn't becomes quarter, shortages, the which and throughput component demand – the spike the converting point the the was as a our in the some to Tom would and AR sometimes that non-linearity of to pushing then the end clearly the caused black with of component

of quarter. of fostered that you there's quarter you customers it prevented the So measure in shortages us component demand our and constraint. number cost But have pretty, first converting. material millions at spilled terms were dollars no quarter converting had that we had But that the what from us when you for able was in a it we it's how prior doubt part the that really point we that order size hesitate pretty I some from but over look give to in of we the number, to convert at think precise I and the it. a

I issue it believe have especially rolling screw” our it's we and will inventory a that raw large levels increased we cases piece. the such convert “golden of better the get because as on kind and, it's and go the better final forward, material waiting So in that, to in just we're hand have

products it's you'd kind acquiring. kind time then clear So build like the that's of a just custom a of we're the to with a less but parts of that answer probably complexity complicated, and the we a see,

it in called quarters. out that. the I I appreciate previous Got had you it. know

improving. on expect a sounds it more So though give the program, little few color or really it customer us as as working? building depend sort the it inventory? similar deposits impact how's though a to on Is you that it's million, dollar-for-dollar the you of bit that it that sounds versus does Could start

the so the it really program. customer a) depends Yes, on and b)

not it's for thing. So a dollar dollar

So with customers clear our that in may be to obstacles screw there some parts golden that out knowing not in work may we may many cases, and time. go acquire

and reasonable try to something out in out we but for we increase work to mutual all, them every don't for support we'll the with make a always it quarter. offset, want if drove agreement happen doesn't So sides go our situations capital the buy us clear and past get deposit to but to parts, both try advanced prepaid pressure. will for front customer with of those deposits customers customers that's customer, that the to more working more because this in that It the

components the second think that is What's back year. Got next in on it, Is coming be I particular of confidence? the for fiscal driving to see September commented expect you initial going or good. production got up of feeling talking and that by just XXXX. your it, stepping that's lighten very half enough to issue time quarters it a the you industry We're that second, particular to to considerably June you just there a adapt? for And

looking We connected hearing close close out we're of to months. of in the up the back stay year. what next for they're the partners. with buy we loosen from It's will it the be manufacturers that And tight connected stay start going components just and distribution six to from. marketplace. very really We end still our that to It's that very with the the

So really it's the getting outlook just on from manufacturers predicated the themselves. for

Got it.

March let's quarter, but way. flat. Well, decline is I this ask, from do and great. Revenue the the year. now away you Okay. there, want does in the to I are then which that up is to seasonal quarter. We're to through want far guys the month how December Generally, look? March don't put Bucking a it too up from out December put starting this

from that look better Can to so and here? given a give of little us we here up So to there kind December it's be far and the in you slightly down, knocked we're is usual bit not doing away flat up do then just expect that here? – a

Yes.

that the look in So they we achieved you levels as there lumpiness many revenue at throughout occasional is some see levels in we and XXXX. that EMS the we fiscal haven't I hesitation revenue sequential those move we're achieved When that only industry is obviously holistically, many, – years. have, QX, associated with sort of increases but

year upon revenue throughout build we're you we go to we as going going So so we think XXXX. I'm percentage but specific suffice not going the to we it those to levels on give that throughout believe say increase, a can build and

I of mentioned for one thinking XXXX. full-year, toward strong further And you double-digit and growth to Fantastic. if FY on go could just kind this the

XX% in but and the FY going quantify like what that's around the in up of looks to look is calculate for want are In I XX% kind really it our that's order for that I implied to I orders XXXX. assume right XXXX implied look QX, for and fact, for I'm million $XXX this ballpark, backlogs XX%, if at now. but at, full-year

I've big you that okay, say, got talking up to over XX% revenue that orders trying well XXXX. year, increase this And I'm growth in about. backlog XX% XX% talked potentially So we're driving about of

prioritize kind shortages, little wrong. you need mentioned there, my the could be be you and bottleneck of could that those I'm of number Help at component delta order technical be could the that’s issues you delta constraints the a kind right are the labor is it just to But if talent that is the that you or…? conservatism, So bit. me maybe those, it think looking about can way,

I hasn't we a think it base, have few in to a It This get we last is was those and finally consistency outline exit where that different back that business happened turnaround, we'll this mature well combination have turnaround. going of variables as our to be and these how a rhythm yourself. all year into them more said we and you years navigated growth. as we've is

that extent workforce things on our changes the expansion, issues, fluctuations, component to we side going are growth growth based achieve will variables those to be levels customer overcoming in ability higher overcoming that overcoming our there affect all can of with levels. of so to on And demand higher achieve

a won't XXXX real for we again, solid percentage, us. a So being give but I growth specific year see

guys tax hear. just how you of about over for much. into you last might Tom. need things great And if go here. you then also these may, That’s I think that to go if just That you thinking modeling start the to so Jeff, two pretty hit kind and be as to be profitable thank rate I we can impact One to next XXX year?

do just Thank have So I'll we NOLs guessing just I'm might covering could have tax the we you a rate two that, you. off. those so issues, jump or hit if

Yes.

around $X.X impact, XXX and and see the in On retained NOLs the And we to $X do to QX. between you'll carrying that the the rate, adjustments I in earnings the that be impact, that estimated to relative to think, tax and that's million impact XX-K, the the reflected made then going million. the disclosure the allowance we've in be have forward we've will

forward not to to that we'll to develop predict huge a impact So process to on us, be a outlook try it and working basis. but a go

it. Got

again. guys. congrats Well Thanks Okay.

Great. right. Thank you. All

Charles from Neuhauser with the comes question next of Our line Mainwall.

Yes, hi.

if one developing the ordinarily margin see growth not new leverage topline strong that improved expect operating fiscal the profitable in getting double-digit as in Just of for back while. factor has been you've would your And talking being XXXX, case issue, of margin. and which course business to in the you're got as to the a

is improvements will year? feel fiscal next the in operating that you question income my see you do So margin

Yes, do. the alluded just to, for you yes. we reasons Yes,

Okay.

So a quarter. respectable in profit to going I me you like did that you ask that Can again, the tells margin fourth cranked a the margin new X.X% business to things from in you consider calculator any up do get operating extent would when see? trusty you offsetting drag business. forward that. operating My your What

more year. increasing As levels But I over the sort to growth year year-over-year the to skis of which of our fundamentals to in upcoming best this see, really is visibility and going my we all far that. X% get got, mature, look get is going solid out we is near-term, into sort which with the I the first as be don't beyond too want place. that I as

to I build beyond XXXX in fiscal we that's think the how time kind me which that see for some that but foreseeable give process. it – the you it have base I as maturing we're and of just improves, means I the So guess future, that

basic made business areas Thanks, exactly. always that you're manufacturer the engaged the manufacturing margin that But – again, contract the are type point you've not in of just business. commodity,

with to the an improve is that there over that next presume I few So you're continue operating expectation forward years. margin move

End absolutely. I agree you. Q&A with of Yes,

further questions to to time. the floor seems this at turn That have like comments. for I'd back we Okay. closing no management over

calling Conference Micro Angeles. presenting be X the will for you in. Investor And Thank on for everyone great. that LD out I'll December in Well, just we Los interested, remind are those at

you. seeing we Thank that's So again to next forward and quarter. forward there, look speaking to you to anybody everyone we look otherwise

This concludes today's teleconference.

time. thank at your And this participation. You may for disconnect your lines you