Rogers (ROG) 2 Aug 202020 Q2 Earnings call transcript

Good day. My name is Jason, and I will be your conference operator today. At this time, I would like to welcome everyone to the Rogers Corporation Q2 2020 Earnings Call. [Operator Instructions] I will now turn the call over to your host, Mr. Steve Haymore, Director of Investor Relations. your begin may you conference. Sir,

be Good Thank today. along the slides with and Investors Please can to the news was to everyone, Corporation you, for of Second issued website, call The turn Jason. Rogers Call. Quarter welcome Conference Slide the that afternoon, XXXX our on found release today’s section Earnings X.

forward-looking are of statements I like Reform XXXX in Private call that statements within Litigation to this forward-looking accounting are meaning that those comparable prepared Also, those Reconciliations conference measures from in during this Before financial not note GAAP would certain Act historical we any is uncertainties accepted considered may the exist non-GAAP most These and not subject market the that our were materially generally can Investors Such to discussions call, begin, Securities should principles. in call section with be Slide as the strictly economic website. posted for conference the the cause be include which include Rogers’ financial on of to demands environment. the and could of accordance measures many today’s competitive measures factors. statement. financial results in factors that operations differ deck to the and conditions, in actual uncertainties directly found of

Senior and turn Bruce. Daigle, Hoechner, CEO; now Mike and over Bob to is President Ludwig, I President Slide President to Bruce me Vice and With call Turning CFO; today X. and the Senior will Vice CTO.

thank you Good for and joining Thanks, Steve. today. afternoon, everyone us

Rogers deliver Despite these to challenging the solid led financial conditions circumstances, quarter COVID-XX QX. during the in expected, pandemic As results. strong execution to enabled market

X. results provide to on more in ongoing Slide Please pandemic. an Before response update turn I’ll to our discussing the COVID-XX our detail,

standpoint, an last Rogers’ environment, and significant and current success. operate did not to call, QX From related businesses to our any highlighted our facilities manufacturing through building I our of during while future positions our experience strengths all to continue are COVID-XX. macroeconomic for operations manage in As priorities essential upon earnings the disruptions as strategic

job protocols. factory to and safety Our continue managing and adapting an the situation robust to of health do current teams excellent

have to their non-manufacturing and customers, They where with needs. are collaboration Our continue design support seamlessly work effective remote transitioned maintaining wins customer arrangements. colleagues we employees to secure with and our

delivering an risk of acted schedule. dynamics. market was foundation Rogers missing critical and keep needed design gives example, For returning technology their of addition EV engaging urgency, a a positions customer employees of shutdown. from and OEM market portfolio at the in a critical sense the support milestone the new a in Rogers’ product on to on overcome forced customer to strong to development balance components This our after dedication, sheet, with current

next X. range. of million Slide financial prior our down X% guidance in were QX our discuss quarter to more $XXX the were Turning within results detail. and I’ll net sales from

favorable per product Second and Gross of guidance. quarter and operational gross were share margin driven $X.XX exceeded strong mix. EPS of margin adjusted XX.X% gains execution by our

we As detail, on Mike the by more cost will our are discuss road progress are in encouraged very map. we improvement making

and increase to the this momentum to operating The due drive margin manage was EPS our will expenses. priority. We to quarter actions we in as prior a built initiative forward timely the top and have continue from XX% gross considerable performance adjusted

most balance stronger generated navigate operating Sales seeing market markets as future in the us other certainly growth our finished more in sheet we pandemic in strength enabling discuss recent challenges wins more XG sequential markets, longer-term general, next while expenses. into the demand these manufacturing to industrial in expected and We impacts areas, two and defense on are quarter greater these aerospace detail continue costs highlighted, higher strong, quarter, to anticipated. revenue. One is As and within The the the comprise slides. the to especially robust but highlight, and carefully by and the look flow offset remains current which a China. the mobility Both automotive. will significant were but are defense sales, second it driven market on of evolution be increased $XX as design third deployments quarter macro cash largely in to XX% free advanced I’ll to focus about and continue from total which million XX%. Rogers, the than opportunity connectivity current in we’ll later. we COVID-XX at relative drove perspective, in don’t of to of the nearly market Also, typically important advanced an opportunity where was infrastructure this manage extend we is our environment, strength by continue wireless business growth. market From investing our also a of sales ACS defense, areas each in of

three mobility, recently fleet automakers on number and electric for broader units It markets. from has ADAS are the Europe All includes toward COVID-XX. opportunities vehicle growth. European, to electrification. are become increasingly by which electrification is additional a stimulus accelerating X. government rapid despite a of near-term statements progression momentum Asian point challenges on our catalyst vehicle of that EV/HEV programs Slide business to US behind clear scale, focused enacted Turning providing On brought in the and in an the Recent advanced

and mobility. to Given prioritize the investments this resources opportunities expanding dedicate to advanced in outlook, intensifying we are focus our capital

five of plug-in vehicles. packaging in power Rogers’ this XX% of PES we advantage over and spectrum years. market the positioned substrate to are well full plus take in technology next the CAGR is the the for mild leading across hybrids segment, expected hybrids, electric used First, semiconductor

to for enable in growth We a carbide modules which market the entire of portfolio product the nitride us have participate strong silicon new EVs. silicon our substrates, address to including power

hybrid per broadly. a point, reference market. opportunity Power And content $XX substrate XX-volt to $X around based electric content can general interconnects range dollar vehicle the vehicle. power full substrate solutions, vehicle additional our a on opportunity our like this can in vary our content an for in mild content although and provide from type levels, a ranges As

We design In suppliers. have to with by secured pipeline number encouraged entrants we wins with as leading a continue market design EMS of EV automakers and avenue this promising growth. and see business, strong wins be and our of activity the of battery to another our

Our other with and pads, our opportunities. strong battery battery can based pressure vary sealing opportunity provide content electric especially in technologies additional pack content content on to types battery business, and our solutions opportunity type dampening an pads factors. PES Similar spans most size, and battery vehicle opportunity battery vibration

in However, have In there an for position in a opportunity pressure leading per opportunity. ACS, example, EVs is ADAS long-term can as $XX market pads HEVs plug-in content than where we battery significant be vehicle. Rogers’ the and greater growth

Although is sales XX% today the manufactured near-term only vehicles auto contain features. challenging, outlook for ADAS of around

average trends that are of are these well opportunities providing sensors reliability become next CAGR advanced mobility demand are also safety the increasingly performance over to expert expected increase per that standard grow the autonomous market driving engineering Rogers’ markets an as Longer features and years. suited to high vehicle. As more the We high number is term toward extremely these at in for in support. several vehicles, developing which expected to XX% strengths, and see applications solutions new

in opportunities across We each ahead advantage to capabilities markets positioned the X. are growth invest well of of we’ll to turn continue Slide Please and advanced take these to our in mobility.

portable electronics XG challenges emerging Our and other limiting advanced connectivity opportunities. and and are creating as markets, infrastructure as focus in along visibility. decline wireless well ongoing trade wireless political an deployments infrastructure, includes In the tensions with restrictions

continue for While to global experts this potential XG of XXXX. stations deployments next the beginning per years in the million to excess creates few for uncertainty, year industry one base in point

the market moderate us. term outlook Although is opportunity continue for this trade competitive positive, and to longer factors XG

that antenna high-frequency demanding. some OEMs we we of design XG less share materials minimal are that lower and are technically will Also, Huawei. on have circuit OEM We based content content designs ranges with seeing varies other power adopt per content for range, average antenna that end have Chinese to from lower content low the customers base approximately of weighted and as The systems. OEM closer to $XXX is adopted $XXX station designs. amp opportunity combined expect the

has by effects Turning impacted The the market overall been COVID-XX in XXXX. to portable electronics. of

total see a units remote then good XXXX. expected this XG we of However, XG which of and relatively XX% phones. Rogers’ has elastomeric which content handsets advanced materials to been contain working phones in the XG in utilize circuit our materials, opportunity, and a growth in our handsets, of year opportunity driven creating roughly solutions. are XX% changes XX% greater market around education. Design incorporated to by XG XX% to increase recent grow the in to are but for tablets, strong, High-performance versus demand are smaller range of opportunity Sales

In the of for ADAS Strong due growth discussed, pursue earth to applications. in offset data were growth automotive by were Internet orbit service, sales in continue shutdowns. deployments in million, and XX% higher materials an the circuit the for an sequentially. defense and demand increase addition to advanced China other Please $XX we next-generation wireless low opportunities expected from XG to decline second factory quarter partially opportunities market Slide high-speed also to materials net used high-frequency turn X. antenna ACS

from builds lower a in Chinese the planned Looking for decline of completed we anticipate and infrastructure. In sales base wireless to current we Recent outlook sales great indicates to rebound and mentioned expected the expect tensions, XG creating uncertain were trade QX, strong market, sales wireless when from in ADAS a deal to infrastructure, due previously around effects the XXXX more design demand potential remain QX de-contenting. ongoing base of auto half late to ahead the end XG lower it deployments content the installations of wins. levels. point than June. data market defense to uncertainty remains decline The the may are in by in a that pre-pandemic in return In station of our but station QX, expectations XG officials

there customer XX%. single-digit a for XXXX growth forward. In although is for remain long-term a number have to by for reduced were lower is seen million, for was multi-year be CAGR market Slide in and from did As rate automotive decline projects. the was primarily of QX a ADAS, see wins market growth sales outlook shutdowns. of The $XX QX. challenges, wireless a COVID-XX. where design This medium the to and discussed believe to going as PES X-year moderate vehicles in in demand in demand to strong, management compared with than substantially market mass X% near opportunity we Market the term result, We rate traditional net infrastructure robust industrial a significant continues turn a due as the sales, but end going related growth in increase transit the significantly defense, earlier, quarter a to second double-digit a this decline supporting inventory saw In decrease high Please demand. sales we EV of reduced power in to projections we rather are stronger sales factory market forward. electric X.

demand have our Recent yields is QX Offsetting QX, sales saw a be significantly we performance. increasing from usage. for in ahead in ongoing due restrictions growth market EV/HEV and from now to COVID-XX the lifted. mass as manufacturing material Continuing subsided. in Europe Improvements vehicles EV been transit COVID-XX. trend margin improvement to the of in we again improvements in operations electric to sales expected quarters, disruptions demand lower gross to contributed anticipate reductions Looking an continue have PES outlook in as prior effects also

market map. We of on cost remain QX in additional solutions improvements, Slide the and sealing general sales to XX. industrial pads in with by the was identified and $XX markets, economic quarter electronics. ongoing are The road impact the stronger the to battery our Sales a Please turn our of but XX%, million, EMS EV/HEV primarily sequential portable net a largest of spot Europe. bright was and pleased was battery decline driven opportunities including demand focused improvement for from in decrease pack were consumer COVID-XX. due

Sales from For electronics in QX seasonal increase. and market similar levels. sales of we electronics expected industrial handsets. applications grow demand to QX increased is for to in battery patterns QX, portable EV/HEV to to anticipated normal and general Portable be are both expect the XG

are seeing remains While some recovery, we current signs of visibility limited.

investments. current the and this are in capital are Please many sales with delaying Our companies given turn to market economic spending XX. correlated uncertainty, levels Slide

I’ll passing summarize before the messages over Lastly, call Mike. key the to

actions while and our to employees’ needs. our took well-being, protect customer continuing also health meet we to First,

a through we deliver solid QX Second, to managed dynamic results. quarter

margin and As evidenced on our and current to our gross response improvement, our took environment. sheet flow improvement focus the earnings balance strong actions by generated timely we We cost maintained and in free road map remains healthy. cash

as visibility opportunities. is maintained we of long-term the Lastly, near-term even view have market a limited,

We advantage in opportunities and in advanced company investing pursuing of to leveraging and are take XG for focused advanced the positioning in accelerating we plans significant mobility are long-term. technologies innovation on our portfolio connectivity. our strong product the and opportunities in growth markets, By the

in Mike our QX I’ll to more discuss Now turn results it to over detail.

guidance. ahead, second and I’ll Bruce review results, our by quarter our followed the you, In everyone. third quarter Thank good slides afternoon,

XX. Slide to Turning

demand but $XXX.X $XXX applications, consumer in the in electronics applications second the guidance responsible well in the and for previously quarter base in market China applications, lower decline for in revenues portable industrial noted general million. within increase quarter. QX, including as XG QX. for serving to Second the the automotive as quarter mitigated million deployments, materials our as Weak mainly $XXX anticipated than materials million, in demand X% of Strong lower range most revenues, station were revenue the were defense

the revenues. experienced product second Our quarter, margin points was of percentage ACS favorable of In margin an XXX top as range of a more mix compared for above basis to the to QX quarter XX.X% the total revenues higher gross higher the guidance our and margin XX.X%. increase of represented end well we the a XX.X%,

material gross in margin. In focus reflected on our manufacturing yields, addition, excellence with profile the our improved matching and our operational revenues including cost is savings higher demand

for past from Lastly, did more the increased the quarter, of DSP offsets we Rogers decision benefited $XX.X in the quarter. in legislation accelerated second tariff for refund reimburse $X.X in income quarters. million certain which tariffs which QX operating a not paid assets will This million we $X million included GAAP China intangible for in COVID-XX-related than incurred trade of expenses $X.X million, the anticipate for second in amortization acquired acquisition of XXXX.

or Adjusted acquisitions. in both amortization audits of fully travel driven lower the certain resulting The second rate GAAP an through as with the be guidance EPS million to excluded we Accelerated per for quarter compared pandemic. intangibles quarter that adjusted The and On discussed of the expenses, income million QX. routine driven in $XX.X effective the share. demand the due in of was quarter, $X.XX the adjusted the to was have XX.X% from reserve than first diluted share significantly revenues and the for $XX.X the million revenues. significantly as from of in acquired assets saving XX.X% was second operating tax an in for higher for end As in a cost GAAP $X.XX second has intangible improved $X QX tax XXXX $X.X of net meaningful of to XX.X% by top of positions was jurisdictions. of of revenues, expire end of acquired in uncertain decrease related increase million QX decreased, earlier, expenses that income quarter second XX, for an life the all of DSP amortization range our million operating both at range foreign top increase quarter XXXX. XX.X% by well be rate higher at is $X.XX from activities QX. $X.XX tax XXXX to significantly second effective end guidance increase and company diluted results $XX.X quarter determined $XX.X the to primarily the EPS lower The will as the from above the fully resulting the delivered per the economic of of margin our basis, mitigate intangible December per share the $X.XX. gross will of these quarter, assets million in QX will our for incremental $XX.X consistent amortization for

to XX. Turning Slide

Our of compared decreased the quarter million QX XXXX. first of revenues $X.X million to $XXX.X

increase decreased from as revenue first the infrastructure second and increase increased quarter, the the ACS X%, primarily and China was impacted revenues consistent resulted quarter of The increase and sequential rollout XG mid continued The in end slowed while first of As to Bruce its aerospace revenues defense increase new in second as XX% a deployments ACS exchange XG XG continue by XX% compared end demand XX% The wireless quarter quarter. came mentioned, at XX%, and and defense increase existing revenues rates on quarter. EMS defense, and wave in into sequentially. million anticipated the in $X.X revenues the unfavorably mostly with capture programs. in decreased peaked the of a resumed QX Currency in XXXX. revenues late from aerospace revenues. increase program deliver revenues The to application we PES

compared down shutdown As quarter revenues customers-built expected, lasted well and ADAS significantly inventory were first the into the QX in second as automakers to our quarter.

which as bright demand expect weak EV/HEV QX being in applications off to ADAS Revenues all quarter, first with auto work EMS a QX the half. industry as lone pad compared to segment XX%. inventory to grew the purchased We to battery third customers even decreased in for in in applications, spot in the our applications need our starts recover remain

segment engagement exacerbated consumer in design pandemic. to wins for due portable materials and in declined revenues, makers development battery which significant devices, Revenues We the OEMs. demand design and new the process the handheld approximately continue with softness for electronics, for to by the Coronavirus XX% our be into encouraged by quarter our of of comprise X% adoption

the EV substrate and revenues the quarter these XX% close power of weak EV/HEV, customers shutdown applications, which quarter resulting to of relatively for for the the Coronavirus to which account applications, and busbars budding automaker orders from see general for consumer weak QX certain QX, X% segment XX% to applications and to to The sequentially decreased quarter. handhelds the sequentially. account PES distribution. earlier. in primarily industrial laser markets, comprised to applications, vehicle XX% over segment production handsets decreased soft electrification the phones. semiconductor revenues drove remain segment Vehicle revenues up such industrial for the Both general threat. the substrates driven applications. general, of manufacturing were XX% a for substrates as declines started for we diverse XX% sequential compared some revenues automotive discussed and as demand XX% areas due quarter industrial QX less increase. compared These for in significant and approximately and the and to for in power coolers of in applications well both than busbar As OEM laminated of power we second revenues our certain laminated due general EV/HEV which industrial first oil XG XX% revenues. and covering increased power semiconductor comprised QX. over content applications, declined demand in by the many Revenues demand demand But revenues, of semiconductor electrification XG the revenues in decreased to for gas segment in lower of were Revenues to as EV/HEVs, these compared for decreased shutdowns, due as Spot applications due including XX% the in exited

Turning to Slide XX.

reduction due costs is $XX expected million execution in mix, The the of million significantly margin In and by in revenues increase absorption was earlier. higher $X.X refund products efforts continued on to lower company in overhead quarter compared not The resulted reduction product increased accrual levels. the favorable made increased encouraged the continued minimal to tariff the mix the EMS a quarter, good we second the from for the cost to gross margin We optimizing the a are efforts, $X Gross and as the repeat refund benefit for benefited increase gross and signs accrued for associated of in in product slow power the recovery improved saw was or in material and be resulting the gross product for mentioned results The wireless lower resources manufacturing margin PES amp for the costs second the the tariff the progress The the to to pandemic percentage fixed spent in to Our in lower revenues. favorable and in In in gross approximately down for margin. Coronavirus moving of first of QX demand specifically ACS with continued million a more volumes, plan due an and improved inventory was of mix. the reserves as Coronavirus yield, remain XX.X% product cost margins quarter China. margin. applications third quarter. quarter, quarter the tariff and pandemic of demand expected second the quarter manufacturing levels. benefit execute for resulting

The PES basis progress the quarter. a improvement margin second point in for in quarter resulted gross second in XXX

by the past operational have through XXX we points. gross improved margin three PES Over basis focus execution, over the on quarters,

capture an basis however of will points improvements to we XXX confident and encouraged increased subject, incremental to XXX the are We volumes. business in

operational a key to focus execution expansion. continue component of gross on as margin We

net generated company is gross of margin quarter As company equivalent basis on margin that evidence income over to compared million. approximately the revenues past net of XXX $XX we details million. the XXXX, generated improvement of gross made adjusted has mix. on In the quarter points QX a $XX.X of higher adjusted The $XX.X is changes gross of basis million less the equivalent to for income XXXX, on of the $XXX a QX the margin second year, of XX.X% improvement for in second XX points of Slide product revenue. to conversion XXX million

for Adjusted of XX.X% income operating or than of threat. expenses operating cost QX’s million revenues was for higher and $X.X revenues revenues million expenses adjusted $XX.X management expenses to expenses The than resulted million lower lower adjust As XX.X% from the reduced for as well operating of related of income. $XX.X QX million. operating reduced travel pandemic meaningfully $XX.X QX earlier, of Coronavirus were as from the QX discussed disciplined resulting adjusted

mentioned, second As tax jurisdictions. rate previously result Rogers’ as foreign tax for to for findings the We communicated XX% increased of quarter higher routine effective effective previously tax XX%. higher accrued certain positions will tax XX.X%, expect a now to rate be our uncertain XX% significantly expected our reserves audit in recording address rate for of to XXXX than

Slide EV excess of million spending facility expenditures. credit of year-to-date June. million to on in a spent in XXXX flow We range equivalent the million. $XX.X fund In invest million revolving lower million and cash our our and outstanding in revolving The ended a paid amounts QX, balances including while balance in is $XX $XX.X on current In look downturn. the of company defense for electronics to on million and to strength our in credit handsets down applications. second million ACS, portable cash with on well for with to QX as will with $XXX.X our activities, reduction continued The and million benefiting opportunities to growth in second we challenges. paydown busbars end include laminated company market $XXX sheet additional opportunities the cash positioned semiconductors and applications on preparing EMS, in $XX.X expect strength revolver of challenges both XG in We at guidance quarter resumption second The XXXX revolving PES communicated with to a and in growth applications defined position We ended the million. OEM the a HEV quarter XX. XX, $XX.X $XX capital and strong We of ended for position a million net EMS. in spent we an launch $XX operating his quarter, million. XX. the the come to the look at invest through facility credit July working to our from the Slide see power In demand company $XX of balance on pad QX included Turning facility. quarter the a The and range, at the repaid generated significant wireless the as withstand battery opportunities discussed infrastructure EV/HEV second and cash in quarter, of in Taking manufacturing generated to $X the capital economic a strong free EV/HEV an $XX.X of of a in Bruce continued challenges CapEx the remarks. slowdown million owed accelerate under opportunities the in revenues, resulted renewed out continuing progress

recovery become as our quarter, signs of a In addition, automotive even will evident anticipate the we third the of work inventory many into applications selling traditional market broader down customers automotive be levels. in will down sequentially as

to have to many a revenues not of in early applications we compared from be the these signs seen Lastly, expect the recovery third quarter. quarter industrial second and general flat

products supply is chain continue that million. produce and for $XXX materials from critical the continue to pandemic. with Our in revenue the are QX our to deliver guidance range with we to will assumption Coronavirus for disruptions minimal will $XXX our estimated of Therefore, supply revenues the million and to provided be customers

manufacturing capital these levels. mix margins lower our operational volumes and demand spending Even with address monitor to pursuit for flex excellence anticipated unfavorable in will and continue we an expenditures impact product and of and efficiency. our actions, our SG&A Likewise, gross negatively continue infrastructure, the to We QX.

back diluted the share. adjusted the I basis, $X.XX questions. to XX%. of guide over We As of to XX% the $X.XX guide to per GAAP $X.XX a will the turn per in in the now of for range result, $X.XX earnings are margin QX the share an third earnings we On gross range guiding fully in call fully to quarter. we for range operator diluted

[Operator question Securities. from of Daniel Moore the from CJS comes Instructions] line Your first

Your line is open.

carbide a substrates, elaborate of I’m silicon and on over afternoon. evolving, Can talk for start described players the And the revenues your Good you and producers we those in taking nitride little start silicon to expect Mike. ramp? that are five for you to that I the you’re is selling Thanks the time when years. that opportunity a questions. key next maybe the a into. who you XX% bit going kind think should about how opportunity see CAGR the Bruce, the cadence with little

the an area So this we in prepared great us. about for as talked remarks, of is opportunity

in number is the the nitride full coming substrates, we industry of silicon we’re the released OEMs with a we activity, Bob, And bit a models that particularly Our expand a what being of seeing maybe believe leading the lot more growth. of model the are on silicon mounting. new for year European design EVs. EV and chip little for see you could in carbide outlook

Bruce. Happy that, Yes. Yes. to do

carbide I who industry those So Dan, players are making think pretty the most makers. in the it’s in module well by In silicon chips. big terms the understood of are cases, packaged semiconductors

the purchase to makers that carbide that find substrate will chips sold and use you’ll them the chips. our package module So are silicon to

with they’re at there’s pretty pretty with all everybody a working much diverse a players people We’re make work of on and a regular level that fair we basis. modules that and or number it’s

us this so. that more is opportunity to driven going for pretty a broad is industry So really be

a majority you’ll I the down cost range translates about that moving toward wide think because battery offer it battery size so automakers the the great degree, they full more producing a into longer with range. gap for going what proliferation also of electric vehicles vehicles same of to or electric hear are semiconductors the the because of basically efficiency, the about and is same way vehicle path vast much for and plug-in that to read the lower higher which are band hybrids is the a think

are electric semiconductors So vehicles, these to opportunity trend applications think arms of as of because coming broader drives. over comes to the it that down growth energy some are, really its in industrial the of to broader I few that But try hear those and at wide of if right the hybrids, next much gap opportunities becomes that what is high-end down renewable the cost EVs, across kind But in adoption. I also And time, also broad time plug-in it you’ll least now a end spectrum market vehicles. you’re the the years. band get your think of really such motor much going the around, a higher over

Whether or we see it that some not year? is fair this half XXXX of the the year to a it’s level into assume if if ramp the year of model back next in

Yes.

what pipeline seeing and I’m the using of new wide the platforms, least EV new of tend vehicles think the hearing gap at platforms band semiconductors. be new to I

I then of And who And But you just switching Helpful. with. to and Bruce. makes in terms is about it. next gears across end opportunity threw type Got vehicle pouch few you’re content higher competing your EMS. think growth years? per special, cells reasonable some you EVs, of there, over talk Maybe what revenue numbers the out the what

on [indiscernible]. with that first take you the of So Bob, part technology the I’ll and the performance let

Yes. sure. Yes,

pouch So and it’s [ph]. for the pretty that technologies in three common packaging There’s battery today. are been primarily the

with little cells. to the basically And heat. you out of piece basically a important pouches. up similar thin need There’s enclosure. an they contact those think often to to stack you size are they’re in of a aluminum You pouch called that need of the pull make size it and fin as paper, printer because have what And heat manage that’s there’s the

those when about to enclosure, shrink. Now charge a a and And lithium-ion and grow large stack discharge they’ll you challenges discharge, when challenges. be up battery you and into think tend run batteries

by XX%. the thinner. swell say, it Also bit get time, to pouches age, as a they over can battery tend little Let’s be

in material premier think yes, in is we’ve has back way this the been the it’s dimension. same so material and might fins. say, our make of let’s factor pressure is a before, PORON talked need you get contact provide. terms imagine, and reliability we these it, since force set, compression then called it you life, cells about a, what call the pad a key I And that over, you compression what’s to which And constant it pouch always XX-year again, maintains as the a of for basically, decades to into think is a between So or heat comes pad this

low set So over have the keeps important the life compression the product a battery, that you of it’s that force. constant

car; money is in really other it a volume they affects is since look The obviously. also thing capacity, for

does possibly if high our and that you you very, So do technology to allowed products. do provide all better thin we solve weight can for as in Frankly, possibly can and can Dan. as job strong better us. Hope technology in. position that, full customers. right comes you then forever battery, need space that’s because problem we a believe lighter density range, energy to customers and I helped, see believe developed you where OEM than and want that that you last a and as as very that to we get the competitive a across have as a that has well pads need our pressure in constant as consistent a And that that that range can We’ve pressure our

of end there In content, north yes, and $XX Yes. higher EVs.

Right. Yes.

And Yes. that’s then specific. and

pressure pads, case, talking forth solutions that vibration additional added in in there’s about be pads, content. pack for sealing there and dampening would We’re so battery also that

Perfect. Last from me.

to and a lower wireless Huawei the path like little the ticking lower a are infrastructure. lower bit again type the the sounds maybe following design content some that once complex average OEMs It less $XXX slightly range. the is end of $XXX to of toward solution? Who down Just are

that de-contenting to much I able been As the about would all focus pretty across be prepared say and with remarks, in stable the the continued in the we’ve we in areas. ways different other is our OEMs OEMs. and continuing talked different position it’s

to stations and impact about we present QX look regard the And manufacture, of and how sorry, outlook into of that designs impact on XG or the As we TSMC have at is I’m -- chips available, on into concern least move ongoing that as possibly as base with to put the also out to impacting forward Huawei with of might that we continue TSMC we move Taiwan. the Huawei being the ability we really of talked so QX. QX, added we forward are that see controls

Huawei more significantly to a of de-contenting? content So less way think versus others right sharing Is about that or with content the it? less

Yes.

at the situation have others de-contenting. Huawei and looking share So on that’s then you

right, in all follow-up with that’s queue Okay, and helpful. jump back any I’ll follow-ups. Thanks.

Thanks, Dan.

B. Your next from question line Ellis comes Craig the of Riley FBR. from

is line Your open.

question. the points some really some follow you the detail. trends guys, exist made for wireless Thanks that to taking your wanted resources you segment marketing And assets you wireless opportunity? how the thanks for all on in and just it of what in the sub if causing on that of Bruce, that for manufacturing up fact now think broader and allocate the headwinds and we term understand in about longer and view And what means about I that we’re is the all towards infrastructure meant R&D, Board’s it, to ACS. allocate as seeing for infrastructure within a away how

business. of as the So we’re There good looking part with a market to for are perspective we that from ACS wireless, outlook this at. the opportunities regard us future of see still the

high-speed satellite forth. in the think orbit and receivers, so antenna advanced past I with talked materials, we’ve low digital, about earth

continues The R&D So with that front. continues. work the on that and work customers

the wins reasons see high And outlined. had. highlighted of is with just see And in all we’ve XG wireless of call, we telecom, defense the the that and that moving opportunity a low significant historical flat business the us outlined growth that employs continuing. being And ACS the still we XG, quarter-to-quarter, headwinds that of that the that business the of in course, this we Specifically for we’ve capabilities But to that frequency we’ve we’ve And long-term I a see XX% basically do because outlook in forward and substantial. we see defense. us we year-on-year, that for there. in the see in continuing lot nature had growth

curamik we of standpoint in where the manufacturing capabilities mobility. the from so forth, advanced we continue perspective, proper a there the that substrates, from capacity. silicon make have So we about allocating investments the We nitride and to talked to in growth ensure capital see and business,

battery it’s pressure we addition, when that the the and ensuring In that forth about separators on needed for business. are talked have EMS and pads also capacity so we ready we

So to we, evolve see point, the corporation for advanced our biggest bigger mobility. opportunities. at the in we again, focus And this opportunity is growth growth the and continue where reallocate

it while all COVID the more versus points it US footprint, helpful, and that economically it with suppliers can that wondering, I and I’m us a the that may you differences span such of little has touch And a sense US many many as footprint follow-up That’s meaningful question. Mike with certainly before world, manufacturing than in has global a And environment? Bruce. global in seeing be as of of What your globe? hand Europe. customer are micro this, of you for we one bit is any that give some more the you’re is Rogers also the that Japan to come seeing for Europe you geographies versus out the demand the a really that question unique customers China,

are perspective back the in office, opening regions. a and much it’s normalcy. back commercial is it’s normalcy, from should see China as China, say, we going seeing that team I operating, basis. as-needed I our staff Suzhou, is But think an our because operating in things see is now market. over and more spiking we’ve our I are let’s basically entire that are factories last is to and and say moving behind how interesting. opening. well, up, would to Asia, China two it to some pretty visiting things get toward In various our and in US an From Germany customers perspective I And return for in the starting It’s in example in moving forward on what now Europe relatively unknown with of how happen. seen or And the Europe say, we extensively to rates, infection right month back the in the the

Two Yes. you, That’s encouraging. Mike. for

a was was if in that average subject First, wasn’t that on clear points statement that was upside there margin, prepared but volume. a to remarks, I PES basis your mentioned or you corporate to gross if XXX statement. of XXX

on company mentioned last of the side think somewhere significant the Certainly, from improvement. that even Yes, specific I right. we opportunity of in points believe that believe basis have, call, a I of material top performance XXX basis Craig, reductions a and about we to that volume. statement. that of I with a think specific from but continued whatnot. XXX I really was couple the standpoint, XXX a points be with corporate hundred was PES think, ballpark that, And volume continued the leveraging to still But quarter, PES I had in comment statement, then we standpoint, captured piece still more we still a still XXX and of the yields, to a on have going second cost it’s

differently, while does long that absent uncertain a off? take headwinds? it to inventory it. demand near Got inventory held remarks, there that term. then XQ in how And significant? are most lastly, that’s for And really was operating business prepared environment, Said in to What’s that’s company’s those up reference view was when where picked normally impacting downstream the burn that’s it’s the the more you

Right.

more some inventory seeing we the see significant before we from a in in to conventional automotive talked conventional perspective. believe recovery remarks, business quarter headwinds pickup early some, we’re bit probably business be we and auto general and probably industrial in automotive about still I and going may in seeing prepared both even some two signs start late as auto though think, I conventional market, the of from our ADAS think, our be that third we in in the it’s business. that think little the saw we say So would ADAS the areas, that it

in hop Bruce, much. you I’ll back queue. very the Thank Mike.

time. [Operator presenters the I’ll this for Instructions] questions closing to further at turn call the There are remarks. no back

everyone everyone. And safe be please want Thank for us I remind want to And you. to everyone to I a social have today’s distance. thank evening, and call. good on joining

That concludes today have Thank conference joining for and wonderful evening. call. today’s a you everybody