Rogers (ROG) 25 Jul 242024 Q2 Earnings call transcript

Good afternoon. My name is Alicia, and I'll be your conference operator today. At this time, I would like to welcome everyone to Rogers Corporation's Second Quarter 2024 Earnings Conference Call. I will now like to turn the call over to your host, Mr. Steve Haymore, Director of Investor Relations. Mr. begin. may you Haymore,

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

Act any be within call not strictly financial accounting forward-looking subject reference Reform Rogers' non-GAAP historical Before are we materially and will note XXXX to available Securities are like of of differ that call cause statements Private as most conditions, X. in uncertainties website. to prepared for in considered could U.S. that forward-looking the today. Please which call, those can this turn accordance that not directly today's to made that statements also demands the exist operations the during discussions should our include slide statement begin, were of from many in principles. I'd in to Investor found measures with The financial competitive market accepted those meaning These factors Slide measures on conference Relations results certain the this uncertainties factors. measures financial be Such in Reconciliations conference GAAP deck generally and and comparable the to are environment. actual economic Litigation

President I Ram and over Turning to will Colin. call and Gouveia, the and me Slide turn to CEO; Colin With Senior is now Vice X. Mayampurath, today President CFO.

messages Slide start and today. for by key thank the Thanks, you Steve. for I'll everyone, on Good the X. quarter us afternoon highlighting to joining

growth our Sales gross quarter, in the and and high energy margin near was our curamik our line impacted areas electronics were of end outlook. The levels exceeded the midpoint margin wireless elevated some and strong this our execution of EV/HEV, improvement of gross such Sales customer the were products, guidance earnings and renewable end industrial drove with near infrastructure. in results markets. Our adjusted solid top portable as Tempering inventory the were in performance range. second which was expectations. stronger in the

manage we to performance areas in environment, improved uneven customer demand we through inventory As the continue challenges drive can the the we and control. current

output in significantly example, as more our while demand. late curamik and quickly slowing substrate high still reduce apparent, return levels than orders QX, were boosted to power due gross For QX reducing We became demand it our margins to increase costs. This retaining should moved inventory action anticipated. consumer manufacturing end swiftly customers to flexibility

to made decreased enabling we transition decision range. The RFS levels of our demand for China, In to announced in higher consolidate in customers manufacturing In products million customer expenses and in we consolidating to million our addition, of as we increased high-frequency in June, to mid-XXXX, this completion in in coming support. Upon the Europe. effort existing utilization factory quarters, rates, will response manufacturing material improved $X we was margins even facility anticipate are RFS provide us $X lower operating operations. to circuit the

We driving of the to remain also growth support focus innovation future on the company.

Griffin process. CTO, development implemented technology our accelerate to As our discussed we several last quarter, actions Gappert, have

unit. near platform with Northeastern Boston, recent technology partnership develop University key the exit action in each to was XXXX new to technologies, Northeastern with programs focused growth. teams select to new co-locate support established R&D academia was our to to develop while A business our scientists on This decision location specific was intent in Rogers' Massachusetts. to location The long-term breakout innovation platform existing

business portfolio that conducted near-term effectively in and innovation technology allow all will approach our long-term address customer Europe over our U.S., but needs This of the and R&D the China. ever, primary R&D can a is horizons. global the remains centers flexibility commitment within the innovation most longer-term to at we Our as unit believe best as teams balanced more strong build base to now

For relevant Roger's such partners longer technical universities proven future will other with the X strategy. track and of our built key records. pillars to innovation, term X ecosystem innovation institutions continue as collaborate must we on with growth projects, be remains of and

line In year, construction in past facility slowdown for terms new curamik a years, and with we several fastest-growing come. making of be have to the years the has impactful for many strong substantial power our growth conviction driver capacity been expansion, progress an this technology Despite substrate we are China. of our curamik product this will the

to module the clear power to China production. footprint been their customers have about Our Rogers have need support a local for

provide facility significant will with the to in to capability quarters. the secured expand meet new and manufacturing level wins recent required support domestic western design our needs OEMs OEMs high whom have of of China both we in Chinese Our

monitor mass mid-XXXX, adjust but needed. demand expect conditions to in timing and to We production as we'll continue begin

X. second review Slide highlights of lower quarter I'll to electronics as curamik substrate end power sales tempered the flat results. next in stronger portable were in wireless by prior primarily and several our million sales $XXX of were quarter Turning markets. Sales to the approximately infrastructure

while adjusted XX.X%, XXX to improved from was margin prior basis Gross EPS point a the increase $X.XX. quarter,

a EMS in Sales solutions results. remain second pressure our also of supply used address summarize solutions strong was to battery gross excellence the Growth business, cell initiatives in sealing scrap, supply and pad targeted top material for in part battery line key the I'll In and needs form our with and prismatic pouch achieved and efforts EV/HEV performance to strong. HEV of demand both a QX with and Beginning that strongest compression factors. market, consecutive our as markets. EV were in sales sales environmental management were QX. and mixed pleased record to quarter and pads of reduce our we demand, margin key operational are yields, our results. the are our in achieve improve delivering with balance chain We sales procurement were on savings. Returning our improvement

sales end softer mentioned, consumer inventory customers EV/HEV through market our substrates power work as in As levels were demand. curamik amidst of the higher lower

markets, about cautious customers seasonal As product the and ADAS XXXX. with in be we were sales to markets, XXXX before QX to growth conditions, for stronger a expect do flat patterns, improvement infrastructure wireless not on an increase in we prior and high was in sales recovery QX. a in QX, program higher order A&D cycle portable in related line. In India. QX in towards strong slightly off a the quarter, market after in line our core in saw Based our wireless timing. In expect points tapering this expectations due refresh excellent infrastructure in remain electronics to demand current smartphone we stronger sales to moderately sales the declined

are We generation next to design project, for secure of this would which wins working ramp XXXX. the in

complete data, remain that is levels customer have primarily line. the the subdued. seen customer we industrial to quarter, while to of increase we QX, destocking inventory across nearly substrate Industrial PMI consistent in to market manufacturing product demand. submarkets, continues in and the many industrial impact European indicate sales activity the our EMS general believe and due declined This U.S. elevated of in power which second levels sales is not with meaningful were flat a

with its in that U.S. indication manufacturers silicon Asian leading substrate our materials for Asian technology development inverter and power energy our of inverter high-power used renewable advanced securing generation was customer's some multiple in Beginning recent progress manufacturer. In the key wins quarters our module utilize EV discuss a PORON latest HEV module highly a Asian applications for made selected This secured. our power conversion wins OEMs. In curamik solar EMS, major have business, technology efficient the leading technology we've is substrate in next the power manufacturer power for batteries. be OEM to their by leading space, with by to its European vehicle. recent will AES a another selected I'll a This were polyurethane provide carbide we in our of supplier. designed module in

vibration challenges and pads Our pads solve management used materials management needs. other be cell will pressure compression to as and address to

X, Rogers responsibility culture, deeply rooted Slide we and proud ADAS, sustainability corporate discuss social published I'll report. environmental, which and our At contributes safer the cleaner, Rogers, recently highlights more work a our lives. and our and governance energy in safer in our and emissions, reduce are commitment is social prominently world. feature markets corporate renewable on Next carbon to from materials connected XXXX help enable that electric to and vehicles, as improve environments such driving

we report ESG dedication responsibility our substantial this sense shareholders of highlights our strong initiatives a business to ESG XXXX operate progress to and have made our our with past the all and year Our stakeholders. towards

GHG development business report our commitment and intend ongoing we significantly emissions, how read to and invite honest to further website. In a past we to emissions X the prioritize the report our For gas our safety employee I'll messages. reduction highlights conducting XX% to example, in closing, manner. today's on also years, have ethical a by you with We key achieve and recap greenhouse in XXXX. The reduced an we go over commitment and

solid execution we gross improved margin and First, earnings. had QX in to deliver

as to we actions are structure driving our further Second, forward cost focus pushing we on improve with growth.

making capacity efforts are development our necessary top changes to also in the we and prudently grow to prioritizing our investing Third, innovation while accelerate line.

balance sheet managing carefully cash to highly our Finally, costs, we maximize and focused flow. on are investments strong CapEx

Ram to the our financial QX discuss performance I'll outlook. it QX Now over turn and

we results I'll of from we were our sales due down end and the mentioned, midpoint tempered begin energy gross in year compared inventories softer versus results this this near XX% substrate EV/HEV, guidance million. renewable discuss detail. we execution and earnings wireless for million lower Colin. prior adjusted On first somewhat highlights higher Overall, $XXX a offset call. and more by AES market prior been the markets. segment Total quarter unfavorable markets. The reportable customer expect recovery power year. demand inventory half to curamik by was sales we basis, X foreign our quarter of and consistent in were slightly currency defense flat industrial, to were range the improvement our on more higher QX end substantial Sales a sales revenue Slide and had were levels mostly guidance range than achieved as in aerospace offset by and because customer as Higher Thanks, nearly in decreased with and EV/HEV, industrial our the results good elevated $XXX infrastructure more these QX. Slide Net high prior to margin. On sales to near by QX fluctuations achieved with decline meaningful in markets. the by the in provided XXXX, results $XXX,XXX. with the of of the see the the curamik of challenges, in has Even the X.X% approximately than EPS in our of X, volume don't some of customer business were I'll

see power positioned opportunity through differentiated technology with broad well module near-term are and great these to we However, challenges. curamik commercial navigate with product relationships have we We the customers. our leading

the expansion from we encouraged increased support by lower to portable by have China. EMS in resulted We by higher slightly demand. A&D also million. electronic received was revenue increase on plans customers The and are sales $XX and offset our our from EV/HEV XX.X%

We seeing in the battery strong are traction by space. the we are encouraged EV

cost in were Turning due taken points power basis The was to the QX margins to QX improved mix to and primarily XX.X% XXX favorable line. our from margins to by product quarter. product substrate Slide the match demand gross in first curamik XX. actions levels and increased

contributor on operations. mentioned our end under-absorbed amount to cost we we respond higher second of near ability it to These actions QX. address quarter, In the demand power the actions than took the gross the small of important margins last to to call, were our in a still we of costs curamik in achieved ensure As an we quarter's parts carrying should that substrate we in return primarily sooner have are operations excess expected. to QX

in expected gross the due $X.XX The $XX margin a in QX. high million costs. by $XX of as to quarter of was partially income was is primarily QX adjusted prior compared typically higher OpEx to improved adjusted share offset from compensation the adjusted million in earnings increased income operating first and was the increase operating of expenses, the our expenses. higher point quarter the net $X.XX net per lower QX adjusted timing result certain second quarter. interest to expenses variable The in Adjusted

QX. cash end Continuing Capital quarter million year-to-date. Slide expenditures of from flow to quarter. the $XXX at increase of $XX in in end of XX. of $XX generated million million, operating June was XX Cash We the $X an were the approximately prior the million and million $XX

Most million, previous repurchases range year have lower of to be expect under the our XXXX. totaled to $X $XX repurchase the in than slightly just $XX million QX. in million of CapEx We full range. Share in happened

As on maximizing through year, forward we will management. through working we margin cash capital move cost reduction improvement, the focus generation and

organic fund shareholders QX, bringing opportunity to authorized operations and maintain of balance the to continue $XXX quarter In our will right Board will used with to growth sheet available the generated We priority. million. at end a of Directors cash be for a should capital be share actionable. Returning million to remain M&A the an additional strong total repurchases, $XXX the from

we with capital done will in our the priorities. other in have share accordance we past, allocation As and evaluate opportunistically repurchases

of $XXX third X% QX due business. General $XXX expected in midpoint sales portable flat are between million quarter. and industrial increase QX. EV/HEV electronics to on range our discuss EMS expected is from expected Next, range XX, Slide and the guidance for to The in to Net in this million. a relatively sales sales be increase are I'll our

to second half. half We that call quarter's we closely for expect the stronger year first this on the improvement. We will will mentioned sales of watch indications be versus last in market of total the continue

the We our in expect that clear business for less AES of EMS to but sales. uncertain business, curamik is given hold substrate true power recovery our for timing it

initiatives. from to and We XX% excellence the for mix guiding of improvement the QX, to range are XX% margin operational gross in be continuing coming product

small a As in mentioned curamik carrying anticipation coming demand be excess of in cost quarters. will stronger amount of we earlier, the

SG&A Depending may to further. on adjusted the projected million evolve, costs costs in are adjusted demand Start-up Third be versus these QX. $X be quarter how expenses remain to similar of to lower start-up QX levels should $X million. range

from adjusted $X.XX Earnings range $X.XX. from $X.XX $X.XX and EPS expected to per share is to to

includes Belgium. of our AES of restructuring-related range EPS of in with associated expenses, most $X.XX QX Our operations this with wind down the

Lastly, we operator call the for that, rate XX%. With project around the I turn be to our to XX% to full will now year questions. tax back

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

similar a temporary see you down curamik? inventory start to near in even Can mentioned the term? we year-to-date, XX% expect look to do HX more you one. And with of Or destock -- you You kind aggressive HX? and do as That's just question, Or in is Anything terms markets? that potential. that longer-term changed key customer market inventory to with part of share, all? and in management those margin B and softness a simply market at end it

one we question. the remains competing fully to organic then start to any China. And curamik our been market, committed invest line we're and product it's And by fastest-growing our to for Thanks here. the I'll business. versus in important Colin talking in about BUs, our facility most of the terms continuing years, that growth of in out for there new loss share we're and several don't still how major see competition. past

design-in winning Chinese OEMs. with is differentiated western technology our still fact, wins and In OEMs

regards very further our and the demand feel of conference sight, recover the close would inventory and that to X the customers demand about we're talked throughout down XXXX. the year. the But products to the and chain, position in and had the issue second last business. What line differentiated and of inventory we also is last a value the half paying visibility talking we good the at past and around lot months, the issues was and in, in market to thinking about attention will the over we of call curamik future So the

the as have question ability as the when will unclear situation. conference the to change a capacity turn be year-over-year. down to market up our call turn soon does monitoring business significantly when want but we we're quickly very do the around. that and to last around, continue possible, will We ramp closely answer things it's So It's from the curamik is

Understood what and we're with certainly seeing in marketplace. the consistent

that's areas well, there but for Given where what's you changed there or Ram, and green are positive described other you areas flattish last little in maybe if XX, quarter installed of seeing the XX saw a will? kind outlook terms momentum? that QX, you're Are still be the you shoots. industrial days, maybe in this Just some weaker? last bit may of And

very EMS quarter thing quarter the Well, from remained our space. the Sure. performance business hybrid in is that's first consistent electric second one vehicle of -- vehicle to the the electric

management, terms or other we had and and and for another battery be record technology the EVs packs So in pressure record second going of found few a dampening into that first environmental hybrids. places a on quarter, and with continued quarter vibration that in sealing can our seals

In to X probably different terms of into it segments. we need general industrial, break

again, power that such cases, motors as industrial, change. last and for no see as curamik also be factories, that your of large applications market slowness and soon significantly on year. will robotics, these that for margin I will industrial did rest And I continue where the question comment we general year-over-year. our said and some Ram So repeating down well would market We earlier, as the the just would what appliances, in commentary. also, participate finish at call as

of as inventory back it of a in issues and manufacturing those hasn't really also a just nonpower started as come had downturn it been matter little to behind and the bit had but answer a the to me PMI briefly earlier question. It of in seems such U.S. so are primarily are gone total that of XX gross these sales turn percentage hasn't markets it's Ram We semiconductor. as we your more represent that as thought. And of downwards, In anticipated. an no segment hasn't are demand served into terms over industrial of normalized, that but there's EMS margin not terms recovering really indices. Europe still by business, of than nonpower in inventory believe, it just more bit shoots, gas X% remains about or us we but or it see let in QX, much flat growth industrial, they increased as make and anticipated just we now the in our and to, green has oil We sure did end to a end a terms we demand. and QX, segment talk bit the

and was question margins your think long-term on I Dan, margins curamik. the impact of Yes. with impact

covered near think slowdown term. I the as clearly Colin

confidence the line we plans with that continuing full in have and product China. in have We are expansion we the

main for One about of in margin, of have reasons with the the made to basis of improvement the from QX, we cost is XXX improvement gross cost points because match to corrections demand. QX

we down ships. taken So have of the number

labor cut possible We all to some in plant on our Germany cost also cuts correct deeper and our made have back where structure. temporary the

So that to basis QX by XXX improved margins from points. our about QX

cost. than recovery, XXX skills to could some anticipation carrying little are that to hard still in critical a are work XXX up. some carrying, of XX recovery a for of probably basis be for the we just faster-than-expected talent which It's basis will quick probably said, we points market, come replace points, As we less costs in

that So Does that's answer impact. margin the question? your

little a and helpful. did you sneak margins level, that see in the that a and to margins have does. -- that very, you post be one the and taken. of bit putting target? a million. last QX a that on XX% despite cost you reduction guide still -- put If And you solid actions at margin very on perspective softer reduction the were we the It but revenue. Previously, just get say, to front in able frame back cost the but you to a queue, from for jump let's quarter aggressive when it you I'll clearly, to hold upside Not very do time that back mentioned given $XXX in

we Yes, do.

the are line in a confident more that line will top bottom with We very see comes the are drop excellence we when our operational lot and back. to activities progress,

B. Our with next the Securities. Craig from Ellis of question comes line Riley

spoke Congratulations wanted things in few just on answering Dan's the to to clarifying question. execution. that start I you margin by a

since do better which in both also one, quarters battery the understand yet businesses So related, on performing? significant between dissonance are curamik business, EV/HEV is of way the X the seeing market? the just is can excess they EV significantly serve us going real you we reconcile help with inventories. successive the How records automotive those what's pads, One, and X

Craig, the say, actually for key we I'll time a and that. lot Colin to question, with would do here. lot because spend mix. discussing Thanks of start The a I customer reason, has

of So to X than and look much world's think some concentration is or about it pretty probably said power And technology X and that the out small at you and all XX% entire power then curamik, module producers quite a when the a overall the module maybe XX% bit power to value entire market a Across companies to go of was of inventory research. module of the those growth look out modules, they goes chain last our the about produce of less that's long the projecting of to to all energy power renewable hit the led it different time. And third-party when a growth, that, primarily year. for This QX so XX% of such slowdown growing end seeing market and kind when that at EV/HEV, just XX% They're too the year, EV/HEV end year, modules, segments we market really, globally. of strong for for rapidly business was period at you we're CAGR. came a curamik power industrial, slowdown. regions, and north be and high

And so power curamik slowdown. module of kind and to the that's led

It months just global but materials key right the the from at just to OEMs customer or, with really pack. some raw with come had answer we've that about for but into issue are an we some All these to other in that been changing we were With some specifications mix customers that ramp OEMs programs your the that last were Does to and out were year, middle specced pushed because hitting EMS, mix, some issue do that able produce EMS last has programs anticipated to together these their being customer of X the perspective they really of get got from is minute with programs And not major ramp. begun key win growth. have our could are suppliers. battery these at now, wasn't with that's major that large driving question? cases, that time for some what

helpful, That's going Colin. Yes. really detail. for level Thanks of that into

was months OEMs. second because on I The I new clarification ago, personal electronics. had had excited personal Three electronic China company think programs we couple were a of the really won with

And to strength some of new Or to And calendar is that in half? so we been play programs? timing saw have the the we the might second is the question relative Is other this. factors expected it in were related in upside at previously that XQ what saw related with those XQ?

driving I revenues the portable in our QX from higher. QX was to increase QX would impactful say QX electronics that in -- the

upside. program wins from independent growing significant so third-party and I show have because a some research higher-performing was us there potential in curamik, to have to we driver Globally, over headwinds But electronics going with about do a is end then phones, the what that. think that increase market growth QX. And X%. organizations for QX, are powering very we then we that see segment that brought course, the with just biggest OEMs into Of mobile the that's we're back excited has as QX forecast the portable the and market slight

this down from those market are the waiting it will could also I and also phones, OEMs that's I come leaders, a read in for growth companies several AI think, the if publications, and And heard are rate their they there of phone that what what from and in is the high-end make can see what coming in to of consumers think customers performing segment. further story is and clear strategy our phone that, accelerate to for, the demonstrate the clear happens, terms that I out still around then various waiting phone? And AI AI cases these is AI think growth mobile if understandable. can use a a with premium we've really phone, phone

So we depends have that It we've consumer we prints, all demand. upside. we're that can so on capacity we're designed in the on how supply develops. and to waiting if these there's installed, see But

Okay.

in months it wasn't it a just make better Colin, of maybe new right? I X portable understand bit with ago. on your what what XQ, basically is sure you to programs OEM line in China It customers. expected customer was sounds some little like electronics strong but tracking that's So and you're legacy a expect plus pull by in still led Is in quarter-on-quarter, new the China that XQ growth the saying,

right. That's

versus point And that margins Ram. to Got was due is cost the to increase next gross Okay. structural due then just XXX can it. great in improvement? a is for mix quarter-on-quarter. you improvement which basis the But one Ram, break out that contribution in the

Craig. Sure,

no improvement activities points. mostly So the excellence QX. if The operational QX basis related there's the to continue, plant curamik about between reduction, and Germany. The in big change was XXX may, cost structural cost you so

the improvements. seeing level are of We same

points basis driven from getting. came we wins and is both RF previous which question, of urethane reductions, improvement vehicles are other So portable in half came the by, also XXX the about mix, the from your to product wireless electronics the our line and cost solutions, and half electric mostly

those the product are we those impact got -- from. mix that X are that So basis another XXX points X the

if sneak more. could it. one in Got I just And

course. Of

as if strong XXXX. side just the and a reaccelerate auto second seeing we for for they what supplier expect the commented recently second radar business that talk to solutions you're chipset of half leading Can potential about on business ADAS that you're you A very go seeing half? through the in

usually one an excellent basis. little for mid-single-digit, annual business We year anticipating bit, at growth an for second slightly significant does as our of of the inventories first year. but last of business with just see the growing customers a year, We that it bit elevated and high on a see us had the half So to that were ADAS year. Craig, in of saying we certainly we're for businesses, half number ADAS range the higher maybe remains us did the slightly a perform

given Okay. thing, kind would launches Colin? that And be new that model stronger and just of

That's right. The X% ADAS light higher growth across or vehicle grow. all X% the the much production light than vehicles is

So it's what's it. that's -- driving

of question next Daniel the CJS line Moore Securities. from comes with Our

to Just of typically, sort is there being of And you Or seasonally to given macro? up challenges, cadence softer than softer know expect be guide I else strongest of reason unless quarters outlook current don't likely but of and a what that the beyond different this the the QX. quick year? one the bit you're today quarter, seeing a the any QX slightly picked follow-up. things something hold QX, macro in typical beyond is would year

That's a Dan. question, good

I about continue. the we we know EMS will strength in now saw business what that is we that QX and are think now seeing

like mostly pad are said, the electronics second X expect, vehicle orders now we half by Colin about half we continued electric than and was EMS driven of that that battery QX delayed the into stronger first to We be seeing will portable said spill that months.

see that. We continue to

From or don't the strong are of an AES the back But QX. have from bounce in we big particularly EMS, business product we what year. closely expect the recovery. watching unit point we know a view, this line closely, curamik EMS to is a we So today, expect what

a the will time little these build trends inventory take expect chain The to of some continue. burn to We through. in

back, the you hold may, that product us QX. in that's if line So will

not this see a the market, that specific year. numbers, but quickly the will So which curamik great growth expect in challenges by I of may recover extent, without EMS giving be continuing to will, we're be to we some offset the think

Understood. multiple new Ram. obviously in products. across strides business lastly, great Completely platforms understood, making EV/HEV, And and winning

the about emerging little talk other just years? maybe X a next thus looking in could move X the Just far, needle beyond opportunity we 'XX. funnel the or really that or bit, Any products technologies

technology. we're of moving there's are we lot would excited Sure. funnel, very new I technologies I happy our would say very is Dan, about that with say thing are one the through our next-generation a and that opportunity radar pipeline.

next our It technology. But We've the customers know. future. There's feel in they're like we years that and radar many exciting gen. It's would in of with in growth already, And quite testing technology we've waveguide, changes to years. comment something but feel and say, very technology, will innovation overnight. prototypes some some is of really but as around grows, is be moving the that in, technology currently, to other be do be it I So robust in got general about would that examples strongly this also we like the the be of you got people us. really towards quite we not portfolio the a good be participate type different will feel in call as we in happens what coming out terms going something other will differentiated will iterative businesses, feel ADAS, it be

question next the Riley B. Ellis Craig Our Securities. comes from with line of

think us? pegged Or to a the some presently? the $X the R&D we when benefit the of and for front China. should fair into just actually curamik the to to to million all benefit to about some that expect I Or that it still make to the move. One, that the was consolidating the that is in that I some that reinvest you are U.S. understood I of of year. to in do with make it, wanted other tactical financially you you line? in manufacturing all of back timing as at the go moves things? timing and And is that say economic And sure of of does realize just what $X benefit I falls benefit wanted announcement start bottom million is realizing XQ And benefit made was

those can clarify it So of some if things, would appreciated. be just you

Sure, Craig.

say just it of piece said shifting... you I'll think in Belgium RFS terms in First, us had curamik, you're production talking about and down then I but our winding the was

Yes. That's it.

Yes. okay.

of So what can bit, as see we're just customer about just recap we Really, little to then demand. trying stay a ahead Ram financial benefits. talk and to the

to certain And line China. customers so RFS a make while migration of customers particular as you they're Europe migrate to keep to have prefer for we've many support in possible, And the to seen product our as the choices locations would where migrating we significant open to.

Belgium. we reversing itself, because the made ultimately, see not ongoing manufacturing so in And to decision as this and situation we difficult an down wind

in That's you capacity will But more we about little will and by logistics it China and we're expect that long And anticipating, the $X it's our talk more term was bit full overall, significant. efficient. supply $X help what quite adding to shortens facility, company It timing Ram the the can customers. more customers our a our And service million a to significantly also will decision on when making benefit. It chain. for and benefit be million. good the to

Yes.

any So we -- investments make elsewhere we $X Craig, net to need that your to is $X in to absorb million million, make of in production. or other China need question, costs to this to

benefit, second net is benefit. year, half full and that XXXX, it So we of in next the expect

Got it.

we the half so all other we exit in as that model. Ram, the half that, XQ we've and maybe got get And so in in year, it of XQ, next

Exactly correct. right. That's

to so don't want certain as of miscues but are there's requalified the that out we're might make manufacturing customers I to to terms coming We terms do will for are that of -- get production right. for Europe. or that we China, quality in sure quickly possible, to we want mention make of completely certain our need And we no we in get then performance. as want there restrictions And move where sure in that

back I'd to further There for are Colin questions time. the over this no closing turn like comments. to at floor

with again. look Thank you. to Thanks everyone forward for quarter. speaking to say everyone, I'd joining just next thanks, and like

teleconference. concludes This today's

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