Q3 2024 TTM Technologies Inc Earnings Call
The End
Speaker Change: Good afternoon and thank you for standing by welcome to the third quarter 2020-4 TTM Technologies earnings conference call. During today's presentation, all parties will be in a listen only move.
Speaker Change: Following presentation, the conference will be open for questions. To ask a question during the session, you would need to press star 1-1 on your telephone. You will then hear an automated message of vicing your hand as rays.
Speaker Change: 2 withdrawal your question, please press star 1 1 again. As a reminder, this conference is being recorded today, we end today up to over 30, 20, 24.
Speaker Change: Samir Desai, TPM Vice President of Corporate Development and Investor Relations will now review the TPM's disclosure statement.
Samir Desai: Thank you. Before we get started, I would like to remind everyone that today's call contains forward-looking statements, including statements related to T-Tam's feature business outlook.
Samir Desai: Actual results could differ materially from these forward-looking statements due to one or more risk and uncertainties, including the risk factors we provide in our filings with the securities and exchange commission which we encourage you to review.
Samir Desai: These forward-looking statements represent management, expectations, and assumptions based on currently available information.
Samir Desai: TTM does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether a result of new information, feature events or other circumstances, except as required by law.
Samir Desai: We will also discuss on this call certain non-gap financial measures, such as adjusted EBITDA.
Such measures should not be considered as a substitute for the measures prepared and presented in the accordance with gap.
Samir Desai: and we direct you to the reconciliation between Gap and Non Gap measures included in the company's earnings release, which is available on the investor relations section of TTM's website at investors.tTM.com.
We've also posted on that website a slide deck that we will refer to during our call. I will now turn the call over to Tom Edman, T.C.M. Chief Executive Officer. Please go ahead Tom.
Tom Edman: Thank you, Samer. Good afternoon, and thank you for joining us for our third quarter 2021 conference call.
Samir Desai: I'll begin with a review of our business highlights from the quarter and a discussion of our third quarter results, followed by a summary of our business strategy.
Speaker Change: Dan Bailey, RCFO, will follow with an overview of our Q3 2024 financial performance and our Q4 2024 guidance.
Speaker Change: We will then open the call to your questions.
Speaker Change: Highlight to the Court's Financial Results are summarized on slide 3 of the earnings presentation posted on TTM's website.
We delivered an excellent quarter and I would like to thank our employees for their hard work and contributions in support of these results.
Samir Desai: In the third quarter of 2024, PPM delivered strong operating margin performance due to higher revenues, favorable mix and outstanding operational execution.
Samir Desai: Revenues were above the midpoint of the guided range representing the third consecutive quarter of year-on-year growth due to demand strikes from our aerospace and defense and data center computing and markets. The latter being driven by Generative AI.
The growth in revenues was partially offset by year-over-year declines from our medical, industrial, and instrumentation and automotive and markets.
Overall, the company book to build was 1.20 with the A&D book to build at 1.26 for the second consecutive quarter.
Demand in our aerospace and defense market, which was 46% of revenues for the quarter, continues to be strong, and we now have a record program backlog of approximately $1.49 billion.
I would now like to provide a strategic update.
TPM is on a journey to transform our business to be less cyclical and more differentiated.
Over the past several years, TGM has consistently emphasized that a key part of our strategy is to add value to the product solutions that we deliver to our customers, particularly in the aerospace and defense market.
Samir Desai: As a result of strategic transactions in the aerospace and defense and market through the acquisitions of anoron and telephonics.
Samir Desai: Over 50% of our revenues in aerospace and defense are now generated from engineered and integrated electronic products. With printed circuit boards contributing less than 50% overall.
Samir Desai: We have been executing against this strategy as our aerospace and defense and operations teams have steadily improved operating margins.
Samir Desai: Another important element of our differentiation strategy is our investment in a new state of the art highly automated PCB manufacturing facility in Penang, Malaysia to service customers in our commercial and markets.
Samir Desai: This new facility in Malaysia is supporting customers and markets such as data center computing, networking and medical industrial and instrumentation.
We continue to make progress, ramping volume production as we manage through ongoing customer audits and qualifications.
Samir Desai: We registered revenues in the third quarter and expect our Malaysia facility to gain further revenue momentum in the fourth quarter as we continue our production ramp.
I'd also like to update you on the consolidation of our manufacturing footprint.
We previously announced our plan to close three small printed circuit board manufacturing facilities in order to improve total plant utilization, operational performance, customer focus and profitability.
During the course of 2023, PCB manufacturing operations in Anaheim and Santa Clara, California and Hong Kong were closed and consolidated into TTM's remaining facilities.
We continue to ramp the auction for the transferred parts at receiving facilities.
Samir Desai: We also have plans to consolidate two smaller non-PCB integrated electronics facilities in Elizabeth City, North Carolina and Huntington, New York into existing facilities in order to improve efficiencies.
Samir Desai: This consolidation will occur over the next three quarters.
Samir Desai: After these consolidation plans are complete, TTM will operate a total of 22 facilities worldwide.
Finally, I would like to update you on the previous announcement of our intent to expand our advanced technology capability for the aerospace and defense market through the construction of a new facility immediately adjacent to our existing Syracuse New York campus.
Samir Desai: This new facility will focus on specialized, high-tech knowledge, and print and circuit board production.
Providing customers with reduced lead times and a significant increase in domestic capacity for ultra-HDI PCBs in support of increasing national security requirements for high technology PCBs.
We have broken ground for the new building and expect an this a low rate production in 2020's next.
As previously announced, we expect the investment for phase one of the proposed project, including capital for campus-wide improvements.
to be in the range of between 100 and 130 million dollars.
Samir Desai: We will be receiving support from both federal and state sources on the order of approximately 52 million dollars. Subject the certain requirements and contingencies.
which will serve to offset the initial capital investment and lower operating expenses.
This month, we celebrated the groundbreaking with a beam-signing ceremony at the site of the new manufacturing building.
KGM executives, the governor of New York, other state and local officials and leading defense customers were present at this milestone of that.
Now I'd like to review our end-of-market, which are referenced on page 4 of the earnings presentation on our website.
Samir Desai: The aerospace and defense and market represented 46% of total third quarter sales, compared to 45% of Q3, 2020, 3 sales and 45% of sales in Q2, 2020, 4.
Samir Desai: The solid demand in the defense market is a result of a positive tailwind in previous defense budgets and supplemental funding related to conflicts in Ukraine and the Middle East.
Our Strong Strategic Program alignment and key bookings for ongoing franchise programs.
We had a strong booking score, with a book to bill ratio of 1.26 for the second consecutive quarter.
leading to a record A&D program backlog of approximately $1.49 billion at the end of the third quarter.
During the quarter, we saw significant bookings for Spy 7, MH60R, and the Japan Aerospace Defense Ground Environment Programs.
We expect sales in Q4 from this end market to represent about 45% of our total sales.
Bookings in the aerospace and defense market, ship over a longer period of time than in our commercial markets, and provide good visibility into future revenue growth.
Sales in the Data Center Computing Enmarket, represented 19% of total sales in the third quarter. Compared to 17% into 3 of 2023 and 21% in the second quarter of 2024.
This end market saw 20% year-on-year growth due to strength from our data center customers building products for generative AI applications.
Samir Desai: Due to customer timing, we saw some deliveries move from Q3 into Q4.
Samir Desai: As a result, we expect revenues in this end market to represent 21% of fourth quarter sales.
Samir Desai: The medical industrial instrumentation and market contributed 14% of our total sales in the third quarter compared to 16% in the year ago quarter and 14% in the second quarter of 2024.
The year over year decline was generally the result of lower demand and ongoing inventory normalization, particularly in the industrial and medical areas.
Samir Desai: We saw increased demand from our semi-conductor testing customers as generative AI drove growth in the DRAM market, leading to increased purchases of automated test equipment.
For the fourth quarter, we expect the medical industrial instrumentation and market to be 14% of revenues.
Automotive Sales represented 14% of total sales during the 3rd quarter of 2024 compared to 15% in the year ago quarter and 14% during the 2nd quarter of 2024.
Samir Desai: The year over year decline for automotive was due primarily to continued inventory adjustments and soft demand at several customers.
We expect our automotive business to contribute 12% of total sales in Q4, as the automotive end market remains challenged in the near term.
Networking accounted for 7% of revenue during the third quarter of 2024.
Samir Desai: This compares to 7% in the third quarter of 2023 and 6% of revenue in the second quarter of 2024.
We saw a return to year on year growth due to recovering demand from certain networking customers.
In Q4, we expect this N-Market to be 8% of revenues. As this market continues to recover, driven by AI-related demand and new products.
Samir Desai: Next I'll cover some details from the third quarter.
This information is also available on page 5 of our earnings presentation.
During the quarter, our advanced technology and engineered products, which include HCI, rigid flex, RF subsystems and components and engineered systems accounted for approximately 49% of our revenue.
Samir Desai: This compares to approximately 47% in the year ago quarter and 45% in Q2.
We are continuing to pursue new business opportunities and increase customer design engagement activities that will leverage our advanced technology and engineered products capabilities in new programs and new markets.
PCB capacity utilization in Asia Pacific was 60% in Q3 compared to 46% in the year ago quarter and 64% in Q2.
On a year on your basis, utilization rates improved as data center demand continues to be strong and other commercial markets started to rebound.
Our overall CompyCB capacity utilization in North America was 35% into 3 compared to 38% in the year ago quarter and 39% into 2.
As a reminder, North America utilization figures are not as meaningful as Asia Pacific, because bottlenecks in these high mix, low volume facilities tend to occur in areas outside of plating, which is the core process that we use for calculating utilization rate.
Our top five customers contributed 41% of total sales in the third quarter of 2024 compared to 43% in the third quarter of 2023.
We had one customer with over 10% of our total sales in the quarter.
Samir Desai: At the end of Q3, our 90-day backlog, which is subject to cancellations and include shipments in the customer hubs, was $638.9 million. Compared to $666.8 million, at the end of the third quarter last year.
And as I mentioned earlier, our aerospace and defense program backlog increased from $1.35 billion at the end of Q3 last year to a record of $1.49 billion at the end of Q3 this year.
Our overall book to build ratio was 1.20 for the three months and did September 30th.
Now, Dan will review our financial performance for the third quarter. Dan?
Thanks for all and good afternoon everyone.
Dan Bailey: I will review our financial results for the third quarter that were included in the press release distributed today and our summarized on slide six of the earnings presentation posted on our website.
For the third quarter, net sales were $616.5 million. Compared to $572.6 million in the third quarter of 2023.
Dan Bailey: The year of your increase was due to growth in our data center computing and aerospace and defense and markets.
Partly offset by declines in our automotive, medical, industrial, and instrumentation in markets.
Gap operating income for the third quarter of 2024 was $51 million as compared to Gap operating loss for the third quarter of 2023 of $10.2 million. Inclusive of a $44.1 million goodwill impairment charge related to the RF and S component segment.
On a gap basis, get income in the third quarter of 2024 was $14.3 million. A 14 cents per diluted share. This compares to GapNet loss for the third quarter of 2023, a $37.1 million or a negative 36 cents per diluted share.
The remainder of my comments will focus on our non-gap financial performance.
Our non-gap performance excludes M&A related costs, restructuring costs, certain non-cast expense items such as amortization of intangibles, impairment of goodwill, stock compensation, gains on the sale of property, and other unusual or infrequent items.
We present non-gap financial information to enable investors to see the company through the Is of Management and to facilitate comparisons with expectations and prior periods.
Samir Desai: Gross margin in the third quarter was 22% and compares to 28.8% in the third quarter of 2023.
The year on your increase was due to higher sales volume, particularly in this aerospace and defense and data center computer and market.
Samir Desai: and improved operational execution.
Samir Desai: So in a marketing expense was $18.9 million in the third quarter, or 3.1% of net sales, versus $17.9 million, or 3.1% of net sales a year ago.
3rd quarter G&A expense was $36.4 million, for 5.9% of net sales. Compared to $37.7 million, for 6.6% of net sales in the same quarter of a year ago.
Samir Desai: In the third quarter of 2024, research and development was $7.7 million or $1.3% of net sales, compared to $5.9 million, or 1% of net sales in the same quarter last year.
Our operating margin in third quarter 2024 was 11.8%. A 170 basis points increase from 10.1% in the same quarter last year.
Interest expense was $11.3 million in the third quarter of 2024 compared to $9.6 million in the same quarter last year.
During the third quarter of 2024, there was a $17.8 million dollar foreign exchange loss below the operated income line.
Compared to a .9 million dollar foreign exchange gain in the 3rd quarter of 2023.
The current year impact was primarily driven by unrealized foreign exchange losses from translation of our China and Malaysia Valenties from local currency into the US dollar functional currency, which experienced significant devaluation against the local currencies in the current quarter.
Government incentives and interest income totally $3.6 million resulted in a net $14.2 million loss For 12 cents, negative impact to EPS in the current quarter
This compares to a net gain of $3 million, for a three-cent positive impact at EPS in the same quarter of last year.
Samir Desai: Our effective tax rate was 9.8% in the third quarter, resulting in tax expense of $4.6 million.
Discompare Australia rate of 12.6% or a tax expense of $6.5 million in the same quarter last year.
Samir Desai: 3rd quarter 2024 net income was $42.7 million, or 41 cents per loaded share.
Samir Desai: This compares to 3rd quarter 2023 net income of $44.9 million, but 43 cents per diluted share.
A Jecidi Bidda for the third quarter of 2024 was $84.4 million, or a 13.7% of net sales compared with third quarter 2023 a Jecidi Bidda of $84.1 million, or $14.7% of net sales.
Depreciation for the quarter was $25.8 million.
The net capital spending to the quarter is $40.9 million.
A cash flow from operations in the third quarter of 2024 was $65.1 million. Or 10.6% of net sales.
Caching Caster Quilllands at the end of the third quarter of 2024 totaled $469.5 million.
Our net death divided by last 12 months EBITDA, was 1.4x below the low end of our targeted range of 1.5 to 2 times.
Now I will turn into our guidance for the fourth quarter.
Samir Desai: We project debt sales for the fourth quarter of 2024 to be in the range of $610 to $650 million. And non-gap earnings to be in the range of 44 cents to 50 cents for the digital electric share.
which is inclusive of operating costs associated with starting up our conduct facility.
Samir Desai: The EPS forecast is based on diluted share count of approximately 104 million shares, which includes the dilute of effect of outstanding stock options and other stock awards.
We expect SGA expense to be about 9.5% of net sales in the fourth order and R&D to be about 1.3% of net sales.
We expect interest expense of approximately $12.1 million in interest income of approximately $2.5 million.
We estimate our effective tax rate will be between 10 and 14%.
Further, we expect to record depreciation of approximately $26.6 million.
Amidulation of intangibles approximately $9.2 million.
Stockbase compensation expensive approximately $8.3 million. A non-cash interest expense, approximately $0.5 million.
Finally, I'd like to announce that we will be participating in the Steveville Midwest 101 Conference in Chicago, I know them were 7. The BSA leveraged finance conference in Boehle, Rathorn on December 3rd, and the UBS Global Industrials and Transportation Conference in Palm Beach on December 4th.
Back concludes our prepared remarks. Now we'd like to open the line for questions.
Samir Desai: Operator.
Thank you as a reminder to ask a question, please press star 1-1 on your telephone and wait for your name to be announced to withdraw your question, please press star 1-1 again.
Speaker Change: and our first question will come from William, signed with Truist Security. Your line is now open, sir.
Great, now thanks for taking my question, because we're at something that could corner it out look. I first want to ask about this sport exchange.
Impact and make sure I understand this because...
While we are accustomed to dealing with these things, you know, episodically with companies.
We haven't heard you guys talk about this in a meaningful way, at least not in my, not in the recent past, not that I remember anyway. Can you remind us, is this the result of a hedge where I really should look at sort of the whole?
Result of the company with this FX impact, or do I think about this as an un-haged sort of one-time effect that...
in a way to get the normalized result. I sort of back it out. Can you maybe just explain this for us a little bit? Thank you. Yeah, it's the latter. Well, thanks for the question. This is Dan. The... it's...
Unhead, it's a non-cash impact from unrealized translation effects on our balance sheets. We have SNIPGEN balance sheet balances in both Asia or China and Malaysia. The Malaysian obviously has increased year over year because we now have that building up.
and because of the third quarter change in the US dollar interest rate, we just had a significant devaluation of the US dollar versus those currencies. So it'd be the latter to your question.
Okay great so operationally it looks like the earnings feed was you know.
Clay the stronger than that sort of nominal.
Speaker Change: Don't get number so I think I get that
Yeah, the other question I wanted to ask about, it's been, um...
Samir Desai: and meaningful issue.
with the company is your execution in Penang. I recall the last call. There was a pushout in the timing to break even in the influence of this.
Samir Desai: Adam.
Samir Desai: The new building and the new facility really on your piano.
Speaker Change: Can you review with us what the effect on the Q3 result was from Penang? Was it as big of a drag as you expected or smaller bigger? And then how you anticipate that trending over the next several corners?
Sure, well, yes, it's been pretty consistent the last couple of quarters at about 180 basis points drag on our operating margin. So it's been consistent this quarter and last and we expect the same level of drag in the fourth quarter.
Speaker Change: Well, start seeing significant revenue ramp up in Q1 and Q2 and as we've said previously, we do expect now to reach break even middle of next year.
Speaker Change: and that's no damn much pretty nicely correct that was what you said last quarter.
That's what we said last quarter. Yeah, and that's exactly right, Willis's time. I just wanted to comment to give you a little bit of additional color on helping Angus going.
Pretty much as we spoke about it last quarter, we are registering revenues, they're insignificant at this point.
Speaker Change: and the next quarter we're expecting to build up in those revenues and as Dan said, in the Q1 and Q2 of next year, we should see a steepening of the revenue climb.
from a qualifications standpoint, really no change or making progress. steady progress there as we go through audits and qualifications. And customer interest remains very high.
and the facility given the opportunity to reinforce or to enforce and apply change resiliency. That interest is still there from the customer base, so really no shift in terms of the characterization of facility from that perspective.
Just one more if I can squeeze it in, the 180-bip stragg today that the facility gets to break even by mid next year is what you are.
The way we should interpret that does that mean effectively holding all of the equal year from now margins will be 100 ebps higher or does it not quite mean that because even at break even it's still a drag.
Speaker Change: No, I'm pretty even, that's you'd get that 180 back so that's zero drag and then but if you look at, so that's a quarterly
Edwin, I've been giving you the 180 basis points, so you're still going to have 2 quarters of that Edwin.
The second half of the year you'll get the zero and the third quarter you'll start seeing it get a little bit of above that we expect.
Mid-Single, Mid-Single, Team, Operating Margins, and that business ultimately as we get to full ramp. So you'll see somewhere between zero and that number as we ramp up in the second half of the year. So for that, we look at it at an annual basis.
Speaker Change: You're not going to get all of that back, it'll be...
So I've been still negative for the full year next year's flight drag but by you know on a quarterly basis you'll be back at you'll be at zero by the you know third quarter. Understood. Thanks for taking my questions. Sure. Thank you.
Speaker Change: Yes, thank you.
Question on the strength that you're seeing in the data center and computing.
Speaker Change: Seigman.
Speaker Change: Could you remind us of what percentage of your revenue there now is from high-risk scale customers and or AI related and in the customer concentration there, a how many significant customers are there in that segment?
So, yeah, about 85% of that data center computing and market at this point is related.
Speaker Change: to primarily the hyper-scaleers and...
Speaker Change: and of course the big driver there is, is General DeVay.
So that's that significantly up as you know Matt from where we were historically.
Speaker Change: The ballads is primarily in the semiconductor side, buildin boards.
from the standpoint of a number of customers.
Speaker Change: Um...
We have steadily been improving in terms of
the Diversity of the Customer Mix there.
It's still if you start looking at you know, hyper-scalers and who's involved in terms of leadership.
and that market, you're still looking at really, you know, a world of four or five.
Speaker Change: Major Customers.
So you're always going to have a relatively high concentration there versus some of our other in markets, but we are trying to work actively to extend our presence across that base.
and Tom in terms of the visibility that you have.
We cover several other suppliers that do see, you know, quarter to quarter volatility there in terms of orders and you already talked about seeing some pushouts into Q4, which is why you raise your guide there.
So could you talk about, like, as you look into next year, you have firm visibility into the first couple of quarters or more or less than that.
Yeah, so the visibility for a certainly, you know, two four, as we've guided and then two one looks solid as well.
The Beyond That gets difficult to, more difficult for a cast.
Really, you know, at this point, the strength.
Looks like we're a solid shape Q4 and then in Q1 harder to project beyond that.
The backdrop still looks very good in terms of capital expenditures in January to the AI.
in terms of innovation that's occurring in that end market that would drive demand.
Significantly Math it, but again, in terms of firm demand signals, it goes through Q1.
and then just question regarding the expansion in Syracuse.
Speaker Change: In terms of the timetable there, will there be any financial impact in terms of margins, right thing next year or is it really more of a fiscal 26 story in terms of when you're going to start to ramp and that sort of thing?
Yes, that's mostly fiscal 2020-26 next year, very little TNL impact.
Thank you very much for being here. We'll be building the facility next year but won't really have it online until very late in the year. You'll start seeing a little bit of depreciation. That's really it.
Speaker Change: Tom.
Okay, thank you.
Speaker Change: Great.
Speaker Change: And the next question comes from Mike Crawford with B Rowley Securities. Your line is open.
Thank you. Can you talk about what impact if any you had at your Advanced Technology Center and Chiplof follows whether it was fire in August. I think this was the facility you got with your I3 acquisition five years ago.
Speaker Change: Sure, Mike, yeah, so actually was in our Chippewa Falls.
Speaker Change: for the Bates Facility, which we've had since 2002, I guess it was.
and Jason or close by that facility we...
Bill Dore advanced technology center that was not impacted it was just in our.
in our main building for printed circuit board production. There was really no impact, material impact at all, Weber.
Speaker Change: and if there was, we would have announced it. The fire occurred, I think, on a Sunday, we were back in production a day later.
So no material impact whatsoever.
Okay, excellent. And then I'm guessing given that auto remains weak that you didn't have a lot of a
Program, Lifetime Value Wins, both in the period, but if you have that number that'd be appreciated and then kind of your outlook for when...
We might expect...
Some Revival in that in Market vertical.
Sure, yeah, so you characterize it well. Market continues to be at this point in a state of flux, particularly because of that.
Speaker Change: The situation in China, the innovation around the EVs there, but the fact that that EV market is largely a China.
OEM EV Market, and so that is it. Certainly impacted the Western World OEM customer base and in turn the tier 1.
Speaker Change: So as they've looked at new programs to that.
They've been reluctant given that turbulence to let significant programs out.
Speaker Change: and those programs that have been let out are programs that are relatively less.
Interest in terms of technology.
Speaker Change: Requirements. So where we are this last quarter we won about 25 million.
in terms of program value.
that is certainly not where we'd like to be.
Speaker Change: I think you're today worth about 106 million.
Speaker Change: It is, I think, representative of a market that is dealing with a lot of turbulence.
and Market that I personally, I think I mentioned this last quarter. This is really the one commercial market where we're not from a TTM expectations standpoint. We're not expecting growth. I think next year we'll be a challenge in years as well.
If you look beyond that, you are other commercial markets.
We are seeing, you know, really turning the corner.
Speaker Change: Um...
Even in a market, such as networking, which is now being influenced by AI. Good to see that growth, good to see data center continuing to be significant.
and the instrumentation portion of our medical and industrial instrumentation and market.
Speaker Change: really starting to pick up.
So again, automotive is the one market where I'm at this point hesitant to say that we will see growth here in the near term.
Speaker Change: Okay, thank you, maybe just one question for me further point. I believe.
Speaker Change: Program, my 10 by a win in the last two years, not a mode of we're 530 million and then 623 million. So, you know, if it's something like 125 million this year and even next year.
Speaker Change: Still those prior wins ought to be programs that are going into production or do some of those prior wins now Maybe go into potentially lowered that volume production then might have been envisioned that time.
Speaker Change: Yeah, no, that's a great point. So the wins we've had in the past two years, I think there's you really have a full spectrum there. There are programs and our focus and where we pick up significant content particularly in the EV space.
Speaker Change: We're gonna see...
those programs, and most of those programs go into production.
but a couple of things are going on, like I think one is...
The ramps, schedules, less aggressive than they were, and the other in some cases.
Speaker Change: The date of production of record has slipped. So certainly as customers recalibrate based on what they're seeing out there in terms of potential demand, they are moving those programs.
Around as well. But by far the majority of those programs will go to production. It's just a question of that. What scale they, how quickly they ramp and the timing of that?
Okay, excellent, thank you very much. Thank you.
As a reminder to ask a question, please press star one one on your phone and wait for your name to be announced. Our next question comes from Jim Rickettsie with Needleman Company, your line is now open.
Hi, good afternoon. This is Chris Gringoffer-Jim. Thank you for taking the questions.
Chris Gringoffer-Jim: He is my first hit. Would be, have you observed or do you anticipate any impact from the district that are going on in the commercial aerospace industry at the moment?
Speaker Change: Hi!
So, great question, just to start, if you look at our AMD revenue, so looking at a business that's counting for 46% of total company revenue, only about 5% of that ties to commercial aerospace.
Speaker Change: and so relatively, you know, if you look at total company revenues less than less than, you know, about 2% of total company. So, not huge exposure there.
With that said, our program content tends to be heavier with the 787.
The 70s, 70s, um...
and not been affected, it's built in South Carolina.
So that's good news. What we have seen overall revenues this last quarter, word down.
About approximately 25% quarter on quarter, but if you look here on year still up 10% year on year and that represents
You know, that continued Saturday, Saturday, Bill, as well as in other areas the anticipation, I think, that this strike may not go on.
Speaker Change: Ford's too much longer, so we'll see what happens there. But again, that's the extent of our visibility, relatively in significant part of a company revenue.
Great, thank you very much. And just to clarify the cap X for the Syracuse expansion, the figure side of the 130 range that's net of the federal and state contributions.
No, that does not include that federal 30 million contribution. So that's pre that contribution.
Speaker Change: Thank you very much.
Speaker Change: Thank you.
I am showing no further questions at this time. I would now like to turn the call back over to Tom Edman for closing remarks.
Tom Edman: Thank you very much. I just wanted to reiterate a few of the points that you made in the call. First, we delivered strong operating margin performance that was driven by higher revenues, better favorable mix, and I really wanted to highlight the improved and ongoing improvement in operational execution.
Speaker Change: Second, we generated a healthy caseloaf from operations at $65.1 million. We also maintained a solid balance sheet with a net debt to EBITDA leverage ratio of 1.4 times.
Third, we continue to make progress on strategic initiatives such as our new facilities in Penang and in Syracuse.
Speaker Change: and in closing I would like to thank our employees, first and foremost, our customers and our investors for all of your continued support. Thank you very much. Goodbye.
This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: Thank you.