Good day, and welcome to the Benchmark Electronics Inc fourth quarter 2022 earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Paul Mansky with Benchmark Electronics. Please go ahead. Thank you, Chad, and thanks to everyone for joining us today at Benchmark's Fourth Quarter Fiscal Year 2022 Earnings Call. Joining me this afternoon are Jeff Benck, CEO and President, and Roop Lakkaraju, CFO. After the market closed today, we issued an earnings release pertaining to our financial performance for the fourth quarter of 22. We have prepared a presentation that we will reference on this call. The press release and the presentation are available online under the Investor Relations section of our website at bench.com. This call is being webcast live, and a replay will be available online following the call. The company has provided a reconciliation of our GAAP to non-GAAP measures in the earnings release, as well as the appendix in the presentation. Please take a moment to review the forward-looking statements advice on slide two in this presentation. During our call, we will discuss forward-looking information. As a reminder, any of today's remarks that are not statements of historical fact are forward-looking statements, which involve risks and uncertainties as described in our press releases and SEC filings. Actual results may differ materially from these statements, most notably due to the ongoing impact of global supply chain constraints, macroeconomic conditions, and COVID. Benchmark undertakes no obligation to update any forward-looking statements. For today's call, Jeff will be covering a summary of our fourth quarter and fiscal year results. Roop will then discuss our detailed financial results in our first quarter and fiscal year 2023 guidance. Jeff will then return to provide more insight on sector demand trends, business wins, and closing commentary. If you will, please turn to slide three. I will turn the call over to our CEO, Jeff Benck. Thank you, Paul. Good afternoon. Thanks to everyone for joining our call today. Hopefully by now, you have seen our press release and results for the fourth quarter of 2022, which again demonstrated our continued execution of our growth strategy. Referencing slide three, revenue in the fourth quarter of $751 million was up 19% year-over-year. Our GAAP and non-GAAP gross margin was 9.6%, while our GAAP operating margin was 3.6% or 4.3% on a non-GAAP basis. Supply chain premiums were approximately $10 million lower than our guidance in the quarter as we continue to see these decrease. Excluding the effect of supply chain premiums, we delivered non-GAAP gross margin of 10.2% and non-GAAP operating margin of 4.6%. When comparing to most of our peers who exclude stock-based compensation from their non-GAAP results, our non-GAAP margin would be 5.2%, given the approximately 70 basis points of stock-based compensation included in our results. We delivered both GAAP and non-GAAP earnings of $0.60 per share, which was another record quarter of earnings for the company. In the fourth quarter, although we saw some greater than expected softening in the semi-cap sector late in the quarter, we still managed to grow semi-cap well into the double digits year-over-year. Coupled with the continued strength in EMS and the diversity of our model, we delivered quarterly earnings at the midpoint of our guidance range. Turning to the full year on slide four. In 2022, we grew revenue 28% and delivered non-GAAP earnings of $2.09. This represented a record earnings performance for the company. GAAP and non-GAAP gross margins were 8.8%, while GAAP operating margins were 3.1%. On a non-GAAP basis, our operating margins of 3.6% were up 60 basis points year-over-year. Excluding the effects of supply chain premiums, revenue grew 20% year-over-year to approximately $2.6 billion, with double-digit growth in five of our six sectors. Non-GAAP gross margin expanded to 9.7%, non-GAAP operating margin of 4% was up 80 basis points year-over-year. I would like to congratulate the entire Benchmark team for their continued execution as we deliver on our strategic objectives. As many of you are aware, we communicated specific financial targets back in 2020 that indicated what we felt was possible by the end of 2022. These were established in the middle of the global pandemic and before the full effect of the related supply chain disruptions were known. Despite these challenges, we never lost focus on our execution and ultimately met or exceeded each of these targets across every metric. However, we recognize this is a journey, and while 2022's results represented a key waypoint, we have much room for further improvement. Now let me pass it over to Roop to share a few more details. Thank you, Jeff, and good afternoon. Please turn to slide six for our revenue by market sector. Total Benchmark revenue was $751 million in Q4, which is 3% lower sequentially and 19% higher year-over-year. Medical revenues for the fourth quarter decreased 13% sequentially due to material constraints. Increased 14% year-over-year due to growth with existing customers and new program ramps. Semi-cap revenues decreased 5% sequentially, while increasing 9% year-over-year. A&D revenues for the fourth quarter increased 5% sequentially due to increased demand. Decreased 5% year-over-year as we worked to try to offset continued supply chain constraints. Industrials revenue for the fourth quarter were down 8% sequentially. Up 14% year-over-year. Throughout the year, we saw increasing demand from energy-related products, building infrastructure, and lidar solutions. Advanced computing was down 2% sequentially, up 55% year-over-year due to the ramp of high-performance computing programs. In the next-gen communication sector, revenues were up 24% sequentially and 64% year-over-year due to continued demand strength from existing programs and new ramps for broadband infrastructure. In the fourth quarter, our top 10 customers represented 53% of sales. Please turn to slide seven. Our GAAP earnings per share for the quarter was $0.60, which represents 71% growth on a year-over-year basis. Our GAAP results included restructuring and other one-time costs totaling $800,000 related to the closure of our previously announced site in Moorpark, California, offset by a net gain of $2.3 million from legal settlements. For Q4, our non-GAAP gross margin of 9.6% improved 100 basis points sequentially, primarily due to a better absorption across our sites and a reduction in supply chain premiums. Excluding supply chain premiums, our gross margin was 10.2%. Our SG&A was $39.5 million, up sequentially due primarily to higher variable compensation and healthcare expenses. non-GAAP operating margin was 4.3%. This compares to operating margin of 4.6% excluding supply chain premiums. In Q4 2022, our non-GAAP effective tax rate was 19.1%, which was as forecasted. For the quarter, non-GAAP EPS of $0.60 was in line with the midpoint of our Q4 guidance, up 25% year-over-year. non-GAAP ROIC in the fourth quarter was 9.9%, a 10 basis point increase sequentially and a 130 basis point improvement year-over-year. Please turn to slide 8 for our revenue comparison by market sector for the full year 2022 versus 2021. Total Benchmark revenue for 2022 was $2.9 billion, an increase of $631 million year-over-year, aided by growth in all sectors except A&D. For the year, medical revenues increased 28% year-over-year from growth with existing customers and new program ramps. semi-cap revenues increased 31% due to increased demand for wafer fab subsystems across our customer base. The A&D sector declined by 9% due to market constraints, even as end demand continued to improve throughout the year. Industrials revenues were up 39%, primarily from continued demand improvements from oil and gas control systems and building infrastructure programs. Advanced computing was up 56% from the planned ramp and execution of high-performance computing programs that will continue throughout 2023. Next gen communications revenues were up 36%, primarily from new program ramps and continued strength in broadband infrastructure programs. Our top 10 customers represented 51% of sales for the full year 2022. We had one customer, Applied Materials, that was greater than 10% of revenue for the full year. Please turn to slide nine. Our GAAP earnings per share for fiscal year 2022 was $1.91, representing 93% growth on a year-over-year basis. Our GAAP results included restructuring and other one-time costs totaling $5.7 million related to the closure of our previously announced site in Moorpark, California, and other smaller restructuring activities, and a net gain of $3 million from legal settlements. Our non-GAAP gross margin of 8.8% decreased 30 basis points due to higher supply chain premiums. Without supply chain premiums, our gross margin was 9.7%. Our SG&A was $150.2 million, up year-over-year, due primarily to higher variable compensation, continued investment in IT infrastructure, and medical expenses. Non-GAAP operating margin was 3.6%. Excluding the impact of supply chain premiums, our operating margin was 4%. Our non-GAAP effective tax rate was 19.1% for the year. Non-GAAP EPS of $2.09 was 55% higher year-over-year. Turning to slide 10 to review the effects of supply chain premiums on a trended basis over the last eight quarters. We expected supply chain premiums to decline sequentially in Q4, and they did, to $46 million versus $74 million in the prior quarter. Excluding supply chain premiums, our revenue in the fourth quarter was $705 million, a sequential increase of $7 million or 1% growth and a year-over-year increase of $113 million or 19% growth. Please turn to slide 11 to review our cash conversion cycle performance. Our cash conversion cycle days were 96 in the fourth quarter, compared to 79 days in Q3. The largest contributor to the increase was due to the lower accounts payable days, which was impacted by inventory being procured earlier in the quarter. Our accounts payable decreased $98 million sequentially, or 19% lower. Total inventory declined sequentially in Q4 by $19 million. Turn to slide 12 for an update on liquidity and capital resources. In Q4, we used $53 million of cash and operations and invested $13 million in CapEx. Our cash balance on December 31st was $207 million. As of December 31st, we had $131 million outstanding on our term loan, $195 million outstanding borrowings against our revolver, and had $251 million available to borrow under our revolver. Turning to slide 13 to review our capital allocation activity. In 2022, we invested $47 million in capital expenditures. We expect our CapEx spending in Q1 2023 to be between $20 million and $25 million. In Q4, we paid cash dividends of $5.8 million, culminating in $23 million for the full year 2022. Since 2018, we have paid cash dividends totaling $113 million. We did not repurchase any outstanding shares in the quarter. The total share repurchased in 2022 was $9.4 million, or approximately 400,000 shares, equal to a reduction of 1% of shares outstanding since the beginning of the fiscal year. As of December 31st, 2022, we had approximately $155 million remaining in our existing share repurchase authorization. We continue to evaluate share repurchases opportunistically while considering market conditions in 2023. While cash flow from operations in Q4, 2022 fell short of our projection, based on the progress we're making in reducing our inventory and management of other working capital elements, we continue to expect to generate free cash flow in the $70 million-$90 million range in 2023. Please turn to slide 14 for a review of our first quarter 2023 guidance. We expect revenue to range from $640 million- $680 million, which at the midpoint represents a 4% year-over-year growth. We are no longer including supply chain premiums in our outlook, excluding these, we are guiding to a midpoint equal to 14% year-on-year growth on a comparable basis. We expect that our gross margin will be between 9.5%-9.7% for Q1, sequentially lower due to reduced semi-cap revenue, higher payroll taxes, and merit increases throughout the enterprise. Our first quarter gross margins are holding up better than our forecasted revenue levels might indicate due to favorable EMS mix. Continuing through 2023, we do have a number of new program wins that are expected to ramp, which will provide some temporary headwinds to gross margins. As we proceed through the second half of 2023, we expect sequential improvement in margins. SG&A expense will range between $38 million and $40 million. Our non-GAAP operating margin range is forecasted to be 3.6%-3.8% for modeling purposes. Our non-GAAP guidance does exclude the impact of amortization of intangible assets and estimated restructuring and other costs. We expect to incur restructuring and other non-recurring costs in Q1 of approximately $200,000-$600,000. The costs relate to continued activities associated with completing previously announced site closures. Our non-GAAP diluted earnings per share is expected to be in the range of $0.39-$0.45, or a midpoint of $0.42. Other expenses net are expected to be $6 million, due primarily to interest expense. Our interest expense is growing sequentially and year-over-year as a function of the additional borrowings to support our growth, as well as the higher interest rate environment. We expect to reduce our borrowings and our interest expense throughout 2023 as we generate free cash flow. We expect that for Q1, our non-GAAP effective tax rate will be between 18% and 20%, with a weighted average share count of 35.5 million in the period. With that, I'll turn the call back over to you, Jeff. Thanks, Roop. Please turn to slide 16. First, let me provide some additional color on the updates that Roop provided. Our first quarter guidance comprehends semi-cap sector softness impacting the first half of 2023. That being the case, we continue to see strength in several other sectors, including medical, industrials, and next gen communications. In both 2021 and 2022, the effect of supply chain premiums obscured the underlying rate of growth in several of our sectors. For comparative purposes, we're providing a view of the sectors excluding these premiums, which we have presented in slide 16 for your reference. In semi-cap, we closed out a banner year in 2022, growing revenue 30%. We've all seen the news from several companies and industry analysts in this space regarding forecasts for lower semi-cap wafer fab equipment spending, attributable to the weakness in the memory markets and global trade restrictions, including those stemming from the U.S. Department of Commerce. Our share gains, our exposure to logic versus memory, and our involvement with EUV systems partially insulate us from this downturn. However, we're not entirely immune. On a near-term basis, we have seen many estimates referencing WFE capital budgets coming down 20%-25% in 2023, which most believe will be first half 2023 weighted. We expect this downturn to be brief by historical standards and are confident in the multi-year demand drivers, including increasing silicon content, the emergence of many new domestic fabs, like here in Arizona for TSMC. Further government investment via measures such as the CHIPS Act. We believe that we'll continue to outperform sector growth rates given our program wins that will be starting in 2023. In Q1, we are forecasting a sequential and year-over-year decline in this sector. In medical, we grew revenue 13% in 2022. This could have been much more, but supply chain challenges acutely impacted our ability to fully meet demand during the year. Looking forward, the anticipated macro resiliency of the medical sector, strength of our customers' install base, and improving supply together give us confidence in the growth expected for the quarter and full year. In industrials, 2022 saw revenue increase 24% excluding supply chain premiums on the back of growth from existing customer products and continued momentum in new program wins. We continue to see our business in industrials shift to support automation and energy efficiency solutions. We expect 2023 to be another growth year for our industrial sector. Moving to the A&D sector, we're expecting recovery in 2023. Although commercial aero demand improved throughout the year, our defense sub-sector was and is more heavily impacted by supply chain challenges and legacy systems where redesign is not an option. However, demand is solid, and we are confident that defense spending will support continued growth. With steady improvement in component availability and deployment of next-generation systems later this year, we expect A&D to be a contributor to our growth. Turning to next-generation communications, we grew revenue in the sector by 24% in 2022, with the last few quarters growing at a much higher rate. We are well-positioned here to benefit from major broadband infrastructure investments, satellite communications proliferation, and government-sponsored wireless broadband programs. We expect 2023 will prove to be a significant year for us in this space, with our sector growth expected to well exceed corporate averages. Finally, in advanced computing, we've been helping build some of the largest and most sophisticated high-performance computing systems in the world. We have a large project currently underway on a new supercomputer platform that will contribute to the next two quarters' performance in this sector. As that project completes, we're expecting sector growth to moderate, resulting in relatively flat revenue for the year. Turning to slide 17, let me finish our sector discussion by highlighting some key wins we secured in the December quarter. Once again, we saw a good balance across the portfolio, reflecting the diversity of complex projects that we take on to help customers navigate through the product life cycle and accelerate their time to market. This helped us end the year with over $930 million in new bookings, which is a leading indicator of future growth. In medical, we continue to be awarded critical medical device and life science programs. This quarter, we won new design opportunities for a minimally invasive robotic surgical platform and a novel rapid cancer diagnostic solution, as well as a manufacturing win for a cosmetic surgery treatment system. In semi-cap, we continue to execute with a number of significant wins. Our 2022 performance was a record year for us in next generation tool bookings. In Q4, we won a manufacturing award for a new wafer handling project. In engineering services, we had key wins in process metrology and in cutting-edge lithography platform. In the A&D sector, we won an RF manufacturing program, which will be used in a compact flight computer for a space application. We also won the design and manufacturing of an advanced communications module that goes into fighter jets. We won a secure communications module for military ground vehicles. In industrials, we continue to rack up wins in the energy space that will also positively impact the environment. This quarter, those included manufacturing wins for a wind energy management system and energy-efficient heat pumps. Within engineering, we are designing test development systems for climate controllers. In advanced computing and next-generation communications, this quarter we had two key wins in EMS and one in engineering. Within EMS, we won the program for a secure biometric reader at an existing customer. We also won the business to provide a high-performance optical transceiver, which represents a new logo for us. Finally, in advanced computing, we're helping an existing customer engineer a large functional tester for a high-performance computing platform. In summary, please turn to slide 18. 2022 was another significant year for us as we overcame many challenges delivering record revenue and earnings. We did this with the aid of double-digit growth in five of our six sectors. We expect that momentum will continue in 2023 across most of our sectors, and we are guiding to grow in at least four of the six. We recognize some customers are frustrated with the current environment as supply chain issues persist. Costs have escalated, and like our peers, we're not able to meet all of our demand. In fact, we continue to have approximately $200 million in unfulfilled demand exiting 2022. We saw gradual improvement last year, but look forward to meaningfully close the gap in 2023, working closely with our OEM customers on solving these critical issues. Finally, I'd like to highlight the team's effort in ESG. I'm very proud to say in its report, published in November of 2022, MSCI elevated us to a AA rating. That puts us in the top 10% of MSCI's peer group for Benchmark. This is obviously a team effort and one for which every Benchmark team member should be proud. In conclusion, I wanna say that I am as confident today in the future for Benchmark as I was back in 2020. We've invested for sustainable growth while further demonstrating our resiliency to overcome unforeseen challenges. I just want to reiterate, despite our near-term semi-cap headwinds, we believe the long-term targets that were introduced at our Analyst Day in November are still achievable by 2025. With the anticipated return to semi-cap growth beyond 23, coupled with the growing frequency of manufacturing outsourcing discussions in key growth sectors and the larger trend toward near sourcing, the leading companies of today and tomorrow need partners like us more than ever to help develop and ultimately build their increasingly complex and innovative products. We look forward to updating you on our progress in the quarters to come. With that, I'll now turn the call over to the operator to conduct our Q&A session. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question will be from Jaeson Schmidt from Lake Street. Please go ahead. Hey, guys. Thanks for taking my questions. just wanna start with the commentary on the semi-cap market. I was just curious if you could provide more color on sort of what you're seeing. You mentioned that it started to soften at the end of Q4. I mean, is this primarily just order softening, or have you started to see more cancellations and decommits from customers within that segment? It was really pushing of orders, you know, to the out quarters. We did see demand drop, that's kinda been reflected in what we're looking at for 2023, Jaeson. As we said, it did start. We had anticipated some slowdown in fourth quarter, that was kinda considered in our guidance, I would say it was more pronounced as we got to the back end of the quarter than we had anticipated. You know, thankfully with the diversity of the portfolio, we were able to still, you know, bring in the earnings in the midpoint of our guidance. As we look into 23, particularly the first half, that softness in semi continues. We also, you know, even since our Analyst Day, there were further, you know, the restrictions on China and, I would say the memory environment didn't get better. You know, incrementally, I think we saw increased pressure on that. The industry, you know, a lot of people are picking wafer fab equipment to be down 20%-25%. Obviously, we feed into that with some of our large OEMs. That being said, you know, we do think that we will do better than the industry. We had gained a lot of share in the last few years, and we do have a number of new wins that will help us there. We also. You know, it wasn't every customer in the segment. You know, there are some customers still that have backlog that hasn't changed that also contribute to kinda supporting that business. That being said, you know, you see us reflecting that there is headwinds in semi-cap. Okay. No, that's helpful. Just curious what sort of gives you the confidence that this is really just the first half issue? It's just assuming, I mean, supply chain constraints ease a little bit, just given how tough this first half is, the second half should be better, or do you have better visibility into some of the orders that you'll start to ship in the second half? Can you just give us some comfort in why the second half should be better? Yeah, I can give a little color there. I mean, we do have, you know, particularly in this, the environment, you know, we do have visibility, you know, into the back half of 2023, and we certainly see, you know, the opportunity for sequential improvement, based on the demand that's reflected on us. Of course, that can change, but right now, we've talked to all of our key customers here. Everyone's pointing to a very strong 2024, and they wanna prepare for that. You know, there's even some thought about, you know, what does the, you know, what is fourth quarter or the back half of 2023, you know, does it incrementally improve from here? We're seeing the more pronounced impact in the first half. Okay. Just the last one from me, and I'll jump back into queue. Just wanna make sure I heard right. I mean, it sounds like gross margin will take a step back as these new programs ramp, but you expect an improvement in Q3 and Q4 sequentially? Yeah, that's right, Jaeson. You know, obviously from a sequential standpoint, from Q4 to Q1, we'll see a slight drop, but still staying strong. But with the new ramps or incremental ramps through the middle of the year, we'll see a little bit of a headwind there, and then it sequentially picks back up in the Q3, Q4 timeframe, as you'd indicated. Okay. Perfect. Thanks a lot, guys. Thanks, Jaeson. No worry. The next question is from Steven Fox, from Fox Advisors. Please go ahead. Hi. Good afternoon. I had a few questions. First of all, just following up on the semi-cap, question about the second half of this year. Jeff, would you attribute it mainly to sort of, new fabs coming online, node transitions, any other color you can provide in terms of why your customers are confident about 2024? Along those lines, there were some incremental, you know, China restrictions from other governments that seem to be online to be enacted. Are you considering those in your revised thinking for semi-cap? Then I had a follow-up. Yeah. I think when you look at 2024, certainly incremental fabs coming online is meaningful. I mean, right here, you know, we're looking across the way here in Phoenix where we're headquartered, and Intel is building a new fab. We got TSMC that's really just signed up to their second, you know, what I would call not just a typical but substantial multi-node fab here as well. There's been a lot of indications that other, you know, handheld device customers are gonna use the most, you know, gonna buy more silicon from the Phoenix area, you know, and the fab that's coming on. You know, all of that, you can imagine, it's not out of the ground yet. The buildings aren't, you know, completed. Obviously, once they come online, you gotta buy the fab equipment to be able to produce silicon and stuff. We certainly see that, I think, as a pretty good pickup. Also, just watching the commentary on memory, you know, right now there's been a lot of pressure on that, but I think people believe that the, you know, inventory gets burned off in the first half, and there's some incremental positive commentary from that. A lot of what we're... You know, we have pretty senior relationships at our customers, and we're talking to them a lot what they're seeing, and they're much closer to it because they, you know, we don't sell directly to an Intel or TSMC, but we, you know, obviously we sell to the wafer fab equipment suppliers, and they're just, you know, universally bullish on 2024. Doesn't mean, you know, that they can't change that view, but we're just trying to give you the best insight we have at this point. I do think that the advanced nodes, the EUV, you know, growth there to be able to achieve some of the, you know, the 5 nm and more, 3 nm technology is more significantly dependent on that. We're seeing, you know, really solid strength in EUV platforms and, you know, a lot of demand there. That also, you know, is great that we've got that, you know, a strong position there and that also supports a little bit of our outlook. That's kinda how we see things. Just one other point. You covered everything except for just, like, the Netherlands. Oh, yeah. ...following through on China restrictions. That's interesting. I can't say that that's fully reflected necessarily 'cause some of that only came out in the last week or two. It's interesting, though. I would tell you that there was a big impact, we thought, in fourth quarter from China and those restrictions, but then people got licenses to ship for one year, and that kinda muted the impact a little bit. It's pretty dynamic. It's a little bit hard to. You know, at first there's like, oh, this is another big impact, but then, you know, I saw the other one moderate a bit. We're kinda waiting to see kinda how that plays out and where people's wins are, you know, with those fab customers. There's also been a commitment, I don't know if you've seen, but, you know, for incremental fabs to be built in Japan and Europe outside of China. While we're seeing a lot go on domestically with the CHIPS Act, there's this increased fabs support and commitment by the governments outside of China. Great. That's really helpful. Yeah. Okay. As a follow-up, the new bookings number is pretty impressive, $930 million. Can you just sort of aggregate from just a high level standpoint, tell us, you know, what's going on with your new win rates, where you've been most successful, you know, what maybe are the key drivers behind, you know, the latest new bookings number that you just gave us? Thanks. Yeah. I mean, we've been on a pretty good trajectory, you know. I think about three, four years ago, we might have done $600 million in bookings and then, you know, we got to $800 million and then $900 million and had another strong year this year. It does vary a lot and so, you know, we've gotten away from this quarterly reporting on it. We did wanna give some indication that, hey, we're still winning at a pretty good rate. We don't, you know, 'cause of the competitors, we don't actually share, you know, what the win rate is, but I feel like we're winning our fair share of what we're going after. We've been a little more selective, I would say, as we've increased capacity. We're really trying to make sure that, you know, we're taking business that fits our margin profile, that's got the complexity and the value add that makes sense for us. You know, there was a nugget in there that we talked about. We had a really strong year in semi-cap, next generation tool wins. They are not gonna contribute to 2023. Unfortunately, because, you know, it takes time for that to come online. We were pretty encouraged with that, particularly since we're investing in some incremental capacity and some new buildings related to semi-cap. That was a very strong quarter for us. Really good participation in industrial and medical as well. It's pretty balanced, you know, across. It's not like, you know, one is a fraction of the other. We do think it's important that we continue that win rate, obviously, if we wanna grow at the, you know, double digits that we've put out in the long-term model. Great. That's all very helpful. Thank you. Yeah. Yep, no question. No, no problem. The next question is from Jim Ricchiuti with Needham & Company. Please go ahead. Hi. Good evening. This is actually Chris Grenga on for Jim. Just with respect to semi and the comment that you expect to perhaps outperform the industry, could you talk about some of the factors that could lead to that outperformance and higher than market growth? Yeah, I mean, I think we touched a little bit, but I can certainly reinforce. We have, you know, over the last few years been gaining share, and there were places where, I think some of our OEMs had single-sourced some tools. We've, you know, with our vertical integration capability where we can machine, you know, we can start with machining a piece of aluminum or welding a frame and then being able to build all the sub-assembly work into it and vertically integrate, has allowed us to participate in some solutions where, you know, they've been produced for a while, but we hadn't been a part of that. We've also won some next-generation tools, while those aren't gonna ramp significantly, in fact, if anything, we've seen a little bit of movement in next gen tools. We are still doing some pilots and some NPIs, some new product introduction work that will, you know, give us some incremental business. You know, the fact that we a few years ago we were pretty dominant with one large player in semi-cap, and now, you know, we really have diversified across the space quite a bit. You know, just participation in EUV, where, you know, it seems like in this environment there's a bit more resiliency there in those kind of solutions, is enabling us to, you know, really mitigate a bit of the impact. You know, as we said, we're not immune to it, we do think that we will grow... Well, depending on how much they're down, then we'll be down less. Yeah. Chris, one additional point maybe just to reinforce. A lot of the news that's come out is memory-focused or more heavily influenced. Oh, yeah. by the memory situation. We have a greater weighting towards logic than memory, so that obviously helps us keep some of that demand up strong as well. Yeah. Good point. Great. Thank you very much. You had mentioned that with respect to A&D, that the weapon system replenishment could be a tailwind. What have you seen there to date? Are you having conversations around that, or is that something that you're just getting ahead of? Thanks. Yeah, I mean, I think it's obviously, we do, you know, we do support subsystems for defense contractors that are supporting the war effort going on over in Europe. We've certainly seen some orders drop in within lead time because there is incremental demand. The bigger challenge, I think, for us and particularly in A&D, is that a lot of the systems, you know, they have a long life cycle, and they're really careful about alternatives and, you know, and even, you know, second source parts and that. It's not given us quite the flexibility to, you know, even look at brokers or other places to get components, and so we've struggled a bit with that. Nonetheless, some of that business is perishable, as, you know, as you can imagine, as those munitions are used, and then, you know, you see replenishment of orders there. That's kind of what we were indicating. Great. Very helpful. Thank you. Thanks, Chris. Once again, if you have a question, please press star then one. The next question will be from Anja Soderstrom from Sidoti. Please go ahead. Hi, thank you for taking my questions. Can you just elaborate a little bit about what you're seeing in the component challenges? You said you expect that to improve throughout the year, but at what pace and where are you currently? I've been hearing from others that they still find it very challenging. Yeah, I mean, what I would've said is, Anja, like a year ago it was so broad-based across so many classes of product. What we're seeing more now is that there's specific analog devices and specific custom semiconductors and stuff that actually, believe it or not, more legacy node. It might be like 60 nanometer product, 90 nanometer, where the particular semiconductor manufacturer maybe is increasing capacity, on the new nodes. There's a reluctance to, you know, to build more capacity in old nodes. Broadly, we are seeing lead times come down and have seen that shrink quite a bit. We still have pockets that are very difficult that, in fact, can gate a build. We would also say, look, it's not wide open. What I'm finding is incrementally we're solving more problems than, you know, we were a year ago, which probably provides a bit of opportunity where we might be able to get something clear or be able to deliver something on a shorter lead time than in the past. It's incrementally better, but, you know, we're still gonna be dealing with this through 2023. We didn't mean to indicate that, hey, it's all bets are off. The other thing is our willingness to buffer inventory, right? We're being more vigilant on bringing inventory down, you know, now as you see upsides, right, it's not like you're sitting on a ton of excess inventory to go do other things with, we have to line these things up. That's kinda what we're seeing. I don't know if you wanna add anything to that. Thank you. In terms of labor, do you still see challenges there, or how's that been developing? It's interesting. You know, it's when I look around at some of the people that are doing, you know, layoffs or resource actions, you know, it feels like the marketplace is gonna soften up, particularly in consumer-related business, maybe even some in more, you know, compute on the laptop side and things like that. I'm anticipating that we're gonna see more available resource. As you can imagine, in our own semi-cap business, we're gonna moderate, you know, what resource we bring on there. At one point, we were going after a lot of incremental resource, and obviously with the demand shift, we're also gonna be balancing what we do. I anticipate the labor market will continue to improve as people get through making the cuts that they wanna make. We still have needs in, you know, we are growing in four of the six sectors, and some of our facilities are on a pretty significant ramp with new product, and we will need incremental resources. Not all of that in the U.S., of course. I think that we will, you know, we will still be pushing that. Inflation puts pressure on that, right, as wages go up and that. I think we're gonna be seeing an improved resource environment as we, as we go through the year. I think, Anja, I'll just add to Jeff's comment, I think, and he made mention of it, I think it's important, where we are seeing additional load and growth is in some of our international sites. Labor will continue to be challenging and bringing on the level of resources and the skill set, you know, into Mexico, into Malaysia, and some of these locations as well, beyond some of what might become available here in the U.S. Okay. Thank you. Just in terms of your new program wins, are most of them from existing customers or adding new logos? Can you also talk about the competitive landscape? It's pretty, it's pretty balanced. We have a number of new logos. I think we referenced one or two on the call. We're winning some incremental business as well. I think in this environment, we don't see a ton of customers looking to necessarily switch EMS providers because of the, you know, of the supply constraints. If you've had a particular partner pursuing that, you know, is it the right time to make a change there? A lot of what we're seeing is customers that, you know, we're insourced and have said, "Hey, in this environment, in this economy, you know, are we the best to do this?" As in, as in the past, we have found ourselves competing more with, you know, internal manufacturing or plans for that. We have seen, follow-on wins with folks that are already with us, but then also, new decisions to build a product, you know, out of the chute with us. We also have seen, pretty good attach rate. I noticed a stat I saw from the team just a few weeks ago that we had, you know, over 75% of our new wins had an engineering component to it, which is pretty encouraging 'cause if we help develop the product, then we're, you know, who better to build than if we do some of the engineering there? That's been a belief of ours, a longstanding belief that that makes sense for us. I would say in the, in the competitive environment, it's been pretty rational. We haven't seen, you know, as we've seen the whole space look at profitability and margins, I haven't seen any competitors do something irrational that has made it inherently more difficult to compete in an RFQ kind of environment. I think from that standpoint, that's encouraging. Okay, thank you. That was all for me. Thanks, Anja. Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Paul Mansky for any closing remarks. Thank you, Chad. Thank you, everybody, for participating in Benchmark's fourth quarter 2022 earnings call. Before we go, I'd like to remind listeners that we'll be presenting next at the Sidoti Virtual Conference being held March 22nd through the 23rd. With that, thank you again for your support, we look forward to speaking with you soon. Good night. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.