Good afternoon ladies and gentlemen and welcome to the Benchmark first quarter 2025 earnings call and webcast. At this time all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Tuesday, April 29, 2025. I would now like to turn the conference over to Paul Mansky, Investor Relations at Benchmark. Sir, please go ahead. Thank you, Constantine, and thanks everyone for joining us today for Benchmark's first quarter 2025 earnings call. Joining us today are Jeff Benck, our CEO and President, and Bryan Schumaker, our CFO. After the market closed, we issued an earnings release pertaining to our financial performance for the first quarter ending March 2025, and we have prepared a presentation which we will reference on this call. Both the press release and presentation are available under the Investor Relations section on our website at bench.com. This call is being webcast live and a replay will be available online following the conclusion of today's call. The company has provided a reconciliation of our GAAP to non-GAAP measures in the earnings release as well as in the appendix to the presentation. Please take a moment to review the forward-looking statements disclosure on slide 2 in the presentation materials. During our call we will discuss forward looking information. As a reminder, any of today's remarks which 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 those statements. Benchmark undertakes no obligation to update any forward looking statements. For today's call, Jeff will start with an overview followed by Bryan's deeper dive into the results and our first quarter guidance. As usual, we will conclude with Jeff sharing more insight into demand trends by sector, new business wins and some final remarks. If you will please turn to slide 4. I will turn the call over to our CEO Jeff Benck. Thank you, Paul. Good afternoon and thanks to everyone for joining today's call. Our first quarter 2025 results demonstrated our continued operational focus despite the tariff-related market uncertainty that we faced late in the quarter. While some customer decisions may be temporarily impacted by today's fluid environment, they have never needed our partnership, advice, and capabilities more. These challenges create opportunities for us as we help them navigate this turbulence and optimize their global supply chain for the most efficient distribution of their products around the world. Let me step through a few highlights on the quarter. First quarter revenue of $632 million was led again by double-digit growth in our Semi-Cap and A&D sectors. At the same time, we delivered our sixth consecutive quarter of greater than 10% non-GAAP gross margin and eighth quarter of positive free cash flow. Non-GAAP operating margin was down sequentially and year-on-year due to the decrease in revenue, but we're confident in our ability to drive margins to 5% and above as we return to revenue growth. Lastly, non-GAAP earnings per share of $0.52 was above the midpoint of our guidance range, continuing our trend of protecting profitability even in the face of revenue headwinds and in part of our business. Turning to slide 5 looking at the quarter, we were pleased by the performance in Semi-Cap which was up 18% year-over-year in the quarter as we continue to gain share from our competitors in this market. Our A&D sector also performed well in Q1, up 15% year-over-year, led by our Defense program where we're in the middle of several new ramps while also benefiting from strength in traditional products. At the same time, we generated another $27 million in free cash flow in the quarter, totaling slightly more than $140 million on a trailing 12 month basis. As for the current demand environment we face in Q2, we've already seen customers pause some shipments while others are looking to pull in specific products given the dynamic nature of the global tariff executive orders taking place. However, with our significant U.S. manufacturing footprint at 36% and our broader North American footprint representing over 55% of our total global manufacturing capacity, I believe we're exceptionally well positioned to help our customers optimize their supply chain. I would also like to take a minute to thank our Global Trade compliance team for the amazing results they delivered over the last few weeks, ensuring that we continue to deliver on our commitments. With that, I'd now like to turn it over to Bryan for more detail on the quarter and our 2Q guidance. Thank you Jeff and good afternoon everyone. Please turn to slide 6. Revenue in the quarter of $632 million was down 4% sequentially and 6% year-over-year. Our non-GAAP EPS was $0.52 which was in line with our guidance range of $0.48-$0.54. As a reminder, our non-GAAP results exclude stock-based compensation, amortization of intangible assets and restructuring and other expenses. For Q1, our non-GAAP gross margin was 10.1%. This represents a 30 basis point decrease quarter-over-quarter and a 10 basis point increase year-over-year. Non-GAAP operating margin was 4.6%, down 50 basis points sequentially and 30 basis points year-over-year, impacted by the lower revenue base. Our first quarter non-GAAP effective tax rate was 25% driven by jurisdictional income mix. Please turn to slide 7 for our first quarter 2025 revenue by market sector. Semi-Cap revenue decreased 2% quarter-over-quarter due to some sequential softening while still growing 18% year-over-year. Industrial revenue was similarly down 2% quarter-over-quarter driven by existing customer demand softness not fully offset by new program ramps in A&D. Revenue was up 4% quarter-over-quarter. Commercial aerospace demand remains consistent while Defense continues to be robust. W ithin Medical revenue was down 12% versus the prior quarter. We continue to see demand softness in the sector led by Medical devices. Finally, ACNC revenue decreased 12% quarter-over-quarter as anticipated. This decline was driven by timing related weakness in both HPC and our communications business. Please turn to slide 8 for trended non-GAAP financials. As you will see, despite the revenue headwinds among several of our end markets, we continue to focus on protecting gross margin which again expanded year-over-year. Meanwhile, operating margin declined slightly both sequentially and year-over-year. Please refer to slide 9 and 10 for discussion on our balance sheet. Cash flow and working capital trends. In Q1, we generated $32 million in operating cash flow and $27 million in free cash flow. Our cash balance on March 31st was $355 million, a year-over-year increase of $59 million. As of March 31st, we had $121 million outstanding on our term loan and $155 million outstanding against our revolver from which we have $391 million available to borrow. Our Q1 2025 liquidity ratio as calculated by our debt covenant was 0.6, down from 0.9 in the prior year period. We invested approximately $4 million in CapEx during the quarter primarily in support of our Malaysia and Thailand facilities. In support of returning capital to our shareholders, we paid cash dividends of $6.1 million in the quarter. We also repurchased $8 million of our outstanding shares. At the end of the quarter we had approximately $142 million remaining in our existing share repurchase authorization. Our cash conversion cycle in the quarter was 86 days, improving three and eight days sequentially and year-over-year respectively. Inventory days were up slightly sequentially, which was more than offset by improvements in accounts receivable and payables. Please advance to slide 11. Let me now turn to our guidance for our second quarter of 2025, we expect revenue to be within a range of $615 million-$665 million. While first half revenue is expected to decline mid single digits year-over-year, we expect revenue of mid single digits in the second half. We expect non-GAAP gross margin to be between 10.2% and 10.4%, which is consistent with our performance over the last several quarters. With those assumptions, we would expect non-GAAP operating margin to be between 4.8% and 4.9%. On a GAAP basis, we expect expenses to include approximately $5.3 million of stock-based compensation and $4.7 million-$4.8 million of non-operating expenses including amortization, restructuring and other charges. Our non-GAAP diluted earnings per share is expected to be in the range of $0.52-$0.58. Interest and other expenses are expected to be approximately $4.2 million. We expect our Q2 effective tax rate will be between 24% and 26%. Our weighted average share count is expected to be approximately 36.7 million. Regarding free cash flow, we expect our Q2 capital spending to be $15 million-$20 million, primarily related to our Penang facility expansion. In addition, our Q2 cash flow performance will be negatively impacted by a $10 million legacy tax assessment related to a 2016 customs audit in Mexico, which was reflected in our Q1 2025 GAAP results. In April, w e also paid our final installment of the 2017 transition tax, which totaled $20 million. Q1 marks the eighth quarter in a row of positive free cash flow and we believe we are structurally positioned to continue this trend once we get past Q2, which includes the tax payments noted above. I would like to turn the call back over to you, Jeff. Thanks, Bryan. Please turn to Slide 12 for a discussion of our performance and outlook by sector. Our ACNC revenue grew an impressive 18% year-over-year in Q1, which was similar to our Q4 performance and clearly a multiple of the market's growth. This performance was driven by ramping wins and share gains we have achieved over. The last few years. The broader industry recovery continues to be mixed due in part to the competing forces of AI semiconductor growth, evolving restrictions on sales of advanced wafer fab equipment into China, increased domestic demand in support of new fabs coming online in the U.S., and capital spending pause due to tariff uncertainty. All things considered, we continue to expect incremental growth in the sector which has been a focus area of investment over t he last several years. To that point, this past quarter we broke ground on a new facility in Penang, Malaysia in support of our future growth plans, further providing us confidence in our continued growth. I was pleased with our breadth of new wins in semi last quarter, which cut across our precision technology, engineering, and EMS capabilities. Turning to our industrial sector, revenue performance was down slightly in Q1, although it may take a few quarters to return to year-over-year growth in this sector. I'm incredibly encouraged by our momentum in terms of new bookings, which was the strongest performance for the company in Q1. These wins included a new digital display customer and new programs with a geospatial solution provider who's expanding with us over time. I'm confident that industrial sector will be one of the greatest sources of future growth, both as a function of our greenfield opportunities and an expectation that outsourcing will become a greater consideration within sector over the coming quarters. Within A&D, this sector continues to perform well for us, driven by strong Defense demand and growing new programs in space. While commercial air demand remained steady, revenue in the quarter was up 15% year-on-year. Based on our existing wins and new bookings, we expect growth both sequentially and year-over-year throughout 2025, supporting our confidence. This past quarter we saw continued bookings momentum across EMS and engineering opportunities supporting A&D, notably within space and Defense subsectors. I'm pleased with our A&D team's performance and look forward to continued momentum over the foreseeable future. In Medical, continued demand, softness in existing programs and customer delays in new program ramps weighed on our results both sequentially and year-over-year. We are confident we have not lost share with any of the existing programs, but as we've highlighted previously, this market recovery has taken longer than anticipated. In the meantime, we've continued to make significant progress in securing new wins within the sector across both manufacturing and engineering. This comes within our traditional Medical and growing life science business, which I'm very optimistic about. As these take time to ramp and our existing programs begin to recover, we're looking forward to a return to year-on-year growth from this sector in the second half of 2025. Finally, our ACNC revenue declined more than anticipated in the quarter due to new program timing issues with both the next generation HPC platform launch that's continued to push to the right and the delayed ramp from a new 5G wireless transport family of products and communications. As we've been saying for several quarters now, we expect ACNC revenue growth to remain challenged through much of 2025. However, within computing our deep expertise in liquid cooling and complex computer system assembly is leverageable beyond HPC and we're working on that. We clearly have proven capabilities from helping to build the subsystems that went into the fastest supercomputers on the planet. Combined with solid booking strength in the quarter, we believe we're well positioned to return to growth in ACNC as early as Q4 of this year. In summary, please turn to slide 13. Our first quarter of 2025 results build on our foundation of delivering consistency. We've been conscious about what sectors we play in and continue to invest where we can add greater value. This has allowed us to improve our mix and increase our value add, which has resulted in us now steadily delivering greater than 10% non-GAAP gross margins despite a challenging revenue environment. While today's global macroeconomic uncertainties create short-term risk, they also create mid to long-term opportunities based on our strong North American footprint and our global reach, enabling production closer to consumption. Furthermore, we're responding to customers' increased propensity to accelerate outsourcing, particularly if they're only building products in one country in their own factory as they realize there is a need to better optimize their supply chain. Leveraging a partner like Benchmark, our opportunity pipeline and inbound quote activity from new large customers is very encouraging. While a return to year-over-year growth is taking a quarter or two longer than anticipated given market dynamics, there is no question it's in flight and barring a recession brought on by tariffs, we expect to deliver sequential growth throughout the balance of the year, which should allow us to grow year-over-year in the second half. In the meantime, we will continue to prudently manage our spending to protect profitability and generate free cash flow for the full year. As it relates to the return of capital, we tend to consistently support our quarterly dividend while stepping up our share repurchase activity, and we will continue to evaluate M&A opportunities as they come to us that align with our strategic plans. Let me wrap up by saying this. Regardless of the market environment, Benchmark will stay on course and continue to invest in strategic growth. We're also going to continue to support our customers as a trusted partner and advisor. We will stay focused and win new business in the sectors in which we participate. There are plenty of organic opportunities for us out there and we have the right business development organization now to capture our fair share. I look forward to updating you on our success in quarters to come. With that, I'll now turn the call over to the operator to conduct our Q & A session. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one. On your touch-tone phone, you will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you're using a speakerphone, please make sure to lift your handset before pressing any keys. Your first question comes from the line of Jim Ricchiuti from Needham & Company. Please go ahead, sir. Hi. Thanks. Good afternoon. Jeff, it sounds like you're seeing some customers pausing, others pulling in. Is the net result of this more of a headwind for you and are the pullings coming into Q2 from the second half? Yeah, what I would say is right now, you know, we see things balancing out so we do not see it tipping one way or the other. I mean, we have seen some of our competitors say they are not seeing movement, we are just reflecting what we are hearing and seeing from customers. What I would say is a few customers are nervous about the second half and where the tariffs may go when this three month pause is lifted. You know, we see where things land out with executive orders. I also think if you are in an area that has a particularly high tariff on it, you might, you might, you know, wonder how is that going to shift and there are other things that can be done so just, I would say more activity than normal here. That being said, I don't see it overly biasing to, you know, helping us more in Q2 or even really materially hurting. It's just, there's just a little more uncertainty, you know, but I would say in the balance it's kind of, it's kind of canceling each other out. Got it. With respect to maybe your existing customers that are looking to do some supply chain optimization or, you know, some of the ones you alluded to there. Newer. Talk to us, are there some initial headwinds that you're going to see from this as customers evaluate their supply chains and you try to accommodate them? I would tell you that our wins, you know, a couple of the bids that we're competing on and looking to close, we've had a few that have taken longer, that have elongated while folks contemplated, think about if you're, you know, you were thinking of going to Mexico, but maybe you were contemplating, contemplating Thailand as well, you're now going, okay, USMCA, seems like it's a good thing. I mean, we're excited that, you know, over 95% of our products are qualifying for USMCA, so we're able to do that without tariffs. That's great. You know, earlier on there was a lot of concern about 25% coming from Mexico and now you got Thailand at 10% or Penang at 10%. It's definitely causing folks to contemplate and have us run some different scenarios and look at different things. I would say that's elongating the cycle a bit on the new bookings for sure. We're seeing some of that happening, you know, and that's kind of, I'm not sure if that's exactly where you were kind of going with your question, but we've seen that cause some of that just, you know, that uncertainty. That's helpful. Last question for me, you sound excited about some of the traction you're seeing in industrial. Where are you seeing it? Are these mainly existing customers, new customers, balance of both? You know, we see some good follow-on business in some of the, you know, electronic controls like for example in, in, you know, HVAC sub sectors and things like that. Beyond that, you know, there just continues to be new growth in AGVs and in some of the automation solutions. We are seeing some nice new incremental wins but then also some repeat business as customers look to do more with us. I would say it's fairly balanced at this point. We also are seeing some kiosk activity. I mean, there's just been a number of new subsectors that we're seeing incremental opportunities. Maybe one other one where we've got some recent wins is in the gaming subsector, which we would, would fall under our industrial as well. I'll jump back in the queue. Thank you. Thanks. Thank you. Your next question comes from the line of Steven Fox from Fox Advisors. Please go ahead. Hi, good afternoon. For my first question, I just want to make sure I heard correctly. Sounds like you're saying first half is down mid single digit percent year-over-year and the second half is up mid single digit year-over-year. Is that, did I hear that correctly? Yeah, that's correct, Steve. If you look at it sequential growth quarter-over-quarter as we look throughout the year. My question is like in the second half when you see that reverse in trend, obviously Defense and Semi-Cap are doing well. Like is there anything else you're sort of seeing a reversal of fortune that we should count on for second half based on current, I mean we're. We're certainly seeing, it's interesting maybe a little different than last quarter. We're seeing some, finally some pickup in Medical and see, you know, Medical having the opportunity for a stronger second half. Some of the current customers that have been down are starting to show, you know, more signs of life from a growth perspective. Also, you know, as we talked about in the script, I think late in the year we see Compute and Telco with a new win on the 5G side of things. Maybe some of that's frankly easier compare as well. We start to see year-on-year growth there. Industrial, I think it's a little bit of wait and see. We certainly see a lot of good new bookings, but you know, those do take time to kick in. We saw a little bit of softness in test and measurement. Industrial right now, there is probably a little more uncertainty there. We are probably, besides NN Semi and A&D, thinking those will continue to be strong through the year as we talked about. Maybe Medical adds to that, and then we start getting more help as you get towards the end of the year. Great, that's helpful. Just a couple other specifics. I wasn't clear. When we think about sort of high end compute programs, do you have a line of sight to others ramping down the road at this point and they've just been delayed? If you could sort of give us an expectation for how that business comes back. I had one other. Yeah, so we do have anticipation that we'll, you know, fully participate with the partners that we've been with on the next generation. It's just the actual chipset and platform seem to continue to move to the right, which has kind of pushed us beyond our expectations that, you know, we might see improvement, you know, later this year. I guess what I would say is it was a little more pronounced down in the front end. And sometimes when you're working on these really large supercomputers, you know, we've talked about helping build three of the top five supercomputers in the world that are built on this, you know, high performance compute platform. While you may not have always, you know, Lawrence Livermore Lab putting in a new platform, there's a lot of smaller systems that leverage that same platform that get built out. We sort of expect some fill in from some of that. It is not like everything is resting only on the new platform. We did see a more pronounced impact in the first half, which dragged down our compute business in that we think that certainly there is new product introduction work that goes on in the second half. The real, you know, significant ramp in HPC will probably be more next year, unfortunately. Although, you know, like I said, we could see some fill in with some smaller systems in the second half and certainly we are engaged in those kind of things. Great. Lastly on Semi-Cap, I mean, Jeff, you talked about a lot of sort of negatives, but you're still growing 18%. I'm just trying to understand, like, I appreciate the disclosure but like how many of those things are having a material impact on the business versus what you expected to see? You know, we started the year where it's like, it felt like really good momentum in Semi, like stronger than even anticipated. Obviously 18% year-over-year. It's great growth. I'm not discounting that. It's like looking out to the back half, I thought, okay, you know, we're off to the races again. But. Certainly, right, everybody's talking AI and this is a driver and it drives some of the most advanced nodes and all of that. The reason that I talked about some headwinds is, you know, just talking to all of our large customers, we're seeing some further restrictions on China and selling into China. You know, in some of these very large OEMs, it might be 20%, 25%, 30% of their traditional sales have been into China. If that gets restricted further or some of the restrictions that have happened have caused some order softening there. At the same time, you know, we've got a brand new fab here in the Phoenix Valley that, you know, keeps, you know, building out. As that comes online domestically, we see demand for, wait for fab equipment to go into that. I guess what we're saying is in balance, like there's headwinds and there's tailwinds. We still think we'll grow at a few, you know, at a multiple of the market growth rate, which I think right now what I've read recently is maybe 3%. We're certainly looking to do quite a bit better than that. I just didn't want everybody to think that, oh, semi is just up and to the right and there's no, you know, there's no risk there. Maybe that's where the transparency is coming from. Yeah, that's super helpful. I appreciate all that color. Thanks. Sure. Your next question is from the line of Jaeson Schmidt from Lake Street. Please go ahead. Yeah, thanks for taking my questions. I know you highlighted in the script that you saw some nice bookings across a number of verticals. Were your bookings up sequentially in Q1? They were up year-on-year, but not up, not up. Kind of more flattish sequentially from our fourth quarter. I think we anticipated a little stronger. I think we talked a little bit about some of the delay where there was a few larger deals that the customer was just kind of waiting to see where things bottom out on the tariff front. You know, those haven't gone away. In fact, one recently closed in 2Q. You know, we'll see. I think things continue to kind of free up once people have a better certainty of where the tariffs are going to land and whether their strategy still makes sense. Right. It was, it was again, you know, good growth year-on-year for us for bookings. And I know we've kind of gotten away from, you know, covered a lot of specifics, but we try to give you some color as to, you know, how we're feeling by sector and what kind of things we're winning. And we shared that in the script. Okay, that's helpful. Is the expected rebound in Medical here in the second half going to be really driven more by channel replenishment or new program launches? For a long time we talked about Medical being down because the channel inventory and some of the, you know, burn off of that and, you know, that working through. I do not know so much that people are going to build up, that OEMs are going to build up inventory again. Just, you know, what we witnessed is some of our customers, their actual business was not down as much as the softness we were seeing. The only way you could really get there from our dialogue with them was, well, they had inventory in the channel that they were working through. Even though they were still seeing growth, we were not. We certainly think that we are gonna, you know, that we will see our base get better. We have also got some new competitive takeaways that we are excited about with a couple new logos in the Medical space. I think both will work together to help us there. Gotcha. And then just the last one from me and I'll jump back in the queue. How should we think about the tax rate in the second half of this year? Yeah. As we're modeling it out, I mean, it drops slightly like we gave Q2, and then if you look out 2023, and for Q3 and Q4, it drops a little bit. Call it 24% for the year. As we look at it, I mean, it's 23%-26% is kind of how we're modeling it out. There's a range there and we're going to drive. We have a lot of focus, right. Now on our strategic plan around tax and we're going to continue to look at that and how we can drive that down. That's kind of the model for the remainder of the year. Okay, perfect. Thanks a lot, guys. Your next question is from the line of Anja Soderstrom from Sidoti. Please go ahead. Hi. Thank you for taking my questions first. In terms of Medical and the inventory levels there, do you feel like they have normalized and that's why you expect to see growth in the second half? I mean, certainly. Yeah, I think we do believe that a lot of OEMs have worked through the bulk of the inventory that was built up. As you can imagine, Anja, we're like one step removed. We do not always get perfect visibility by product line. We knew in general there was a lot of dialogue over the last 18 months about where they were with inventory and needing to work through it. I think that is really why we're seeing a reflection of the demand, order, load, pickup, really even Q3 and beyond, because we are now getting six months visibility and we see some improvement there. I think that is sort of playing out for us as you described. Okay, thank you. You also mentioned your large footprint in the U.S. and North America. What kind of capacity utilization do you have there and what availability do you have to move projects over there? Yeah, we do not kind of publish really our capacity by site. Just suffice to say, I think we said over 1/3 of our footprint is U.S. based. You know, given the softer macro environment, we just have a lot of opportunity. Even with some of the consolidation we have done, we have gotten more efficient in the factories we are in. We are trying to make sure that we have a lot of open space because customers a lot of times, particularly new OEMs, will come and say, okay, where can my product sit here? We just believe that we know from where we sit that we can really accept quite a bit of incremental business. We're certainly seeing with what's going on with the tariffs and the desire to potentially nearshore or reshore domestically, we're seeing some nice inbound incremental opportunities that are coming forward and kind of try to touch on this in the script that, you know, if you think about an OEM that might be building in their own factory and right now OEMs that large, OEMs that are in multiple sites with us are saying, oh, I might want to shift some of my, you know, Thailand demand to Mexico or maybe I'm going to move China to Thailand or. They have that flexibility if they're in multiple sites with us. If you're like building your own product only in one site, you really don't, you really miss that opportunity. I think that's causing some OEMs to say maybe we shouldn't be building everything ourselves. If we were leveraging a partner like Benchmark, they could help us pivot. We certainly are standing at the ready to help a few customers. I think a lot of customers, there's a little bit of wait and see right now. Like we don't see huge demand shifts, but we see a few that have said, you know what, I'm not comfortable just being in Asia, Southeast Asia or just being in Mexico, I may want to split that production. That is the kind of opportunity we offer. We certainly feel like that, you know, that this is a great opportunity for us. We've got a brand new site in Guadalajara that came online at the end of last year and is ramping some new Medical customers, for example. You know, there are things that just make sense to be done in the U.S. Whether it is like HPC going to a national lab or you think about some of the build out that is happening with data centers and such. I mean, that is an opportunity. We talked a little bit about our water cooled infrastructure that comes from our HPC space, but you kind of say, you know, there is no question we can help with some of the more sophisticated data center solutions that are water cooling based. We are having some early discussions on that and trying to leverage it. You know, we just think that is a bit unique for us that we are not, you know, as you all know, we only have one factory in China, but we have 10 in the U.S. You know, if people want to build more product domestically, we're ready to go. Okay, thank you. Just in terms of the cash flows, nice improvement in cash conversion. Is there room for further improvement there and do you have sort of a target? Yeah. If you think about kind of inventory, I mean, we're going to continue to drive the day's inventory down on a kind of factor of now what I would say is you could have some improvements on that cycle. It could be offset by some of the growth in new programs, launches. Then on the other side, AR, I mean, we're going to continue to work that along with AP. There is no target out there. Again, we've always talked about the four turns on inventory, whereas now, I. mean, the four turns today where we. Want to get to closer to the five turns. That is what we will continue to drive towards on that front. Yeah, that's what I would say. We're not satisfied at 4. There is good improvement to get there if you take net of advanced payments. We're probably north of. We are north of 5, but we see opportunity to go further. I think, as Bryan said, growth and bringing on new customers, where we need to invest in some inventory, could be a headwind as we get in the later part of second half. We certainly strategically think that, you know, we need to be north of 5. Okay, thank you. Just one last one on the currency with sort of pressure in the dollar. Are you hedging at all? Yeah. What I would say is if you look at our overall revenue top line, I mean, we're about 80% US dollar already. We have some natural currency hedges over in Europe. We do offer or we do some hedging in addition to that. Now, as you've noted, I mean, there has been significant fluctuation in currencies, but for the majority of it, we are hedged. Okay, thank you. That was not from. Thank you. Anja. Your next question is from the line of Melissa Fairbanks from Raymond James. Please go ahead. Hey, guys. Thanks so much for squeezing me in. Jeff, I just wanted to follow up. On a couple of things that you've said in answering a couple of different questions. The first was about elongating the cycle in terms of the new bookings that you're getting. I've been around a while. We've seen a lot of macro uncertainty in the past, but this really seems kind of unprecedented where some of these delayed decisions, it's reliant upon a lot of moving parts and they seem to be a little bit more weighty than. What we've seen in the past. Knowing that the lead times for a brand new program typically extend into several quarters, I have two questions. One is how quickly can you pivot or launch a new program in a new facility based on what your customers want? Two, does this potentially extend a bit of this headwind beyond just the next few quarters? Because if customers are delaying their decision making, that means we are slower to actually ramp the new programs and then we are slower to bring in that new revenue. That may be a very loaded question and I do not really expect an answer. No, that's okay. I mean, I can give you at least my view of it. I think that moving a customer at an existing facility, it's pretty challenging to do it in a quarter. If we're building it and we've got obviously the manufacturing, you know, inside knowledge and it's something that we're building in another facility when we can leverage our teams, right, for their know-how and that hidden factory factor that sometimes you deal with, you know, I think we've been successful in doing something in six months, you know, having something completely moved and ramped pretty significantly. What's exciting about, even though some of these things are delayed, some of the deals that we're looking at are actually competitive takeaways. What I like about those, they're already in production. When you have a new Medical product that, oh, I got to go get FDA certified and I got to build samples and then I got to go test it for a year, that can take two years. Some of the deals that we're looking at that have been delayed or strung along, their product is already being built either in a region or maybe domestically, and they're looking to move to a lower cost region. I would say even though it's kind of elongating, those can happen quicker. When you win that kind of business versus the greenfield or the brand new life sciences product. Right. That we may be helping, doing the engineering on. Right. We kind of have a mix of both. Some of what I'm seeing more recently are really competitive takeaways where, you know, they're already building the product in the region, they want to move to me in the region. At the same time they're like, you know, if we're going to move to you, do we move to you in Mexico or do we move to you in the U.S., you know, and can you call me in both your factories? Right. Some of that is what you know, and it is, I think we are in unprecedented times in terms of it just being very dynamic and you got to be flexible. What's kind of interesting is more of our OEMs are coming to us wanting to have the strategic sourcing discussion about how do we think about it, how can you help map where I should go, how I think about not only what you build, but the supply chain. Those are some pretty interesting discussions that we can bring a lot of, you know, experience and knowledge to bear and help with those. I don't know that this is a multi-year kind of cycle thing, but certainly everybody's kind of waiting to see do some of these tariff agreements get done and then this stuff, you know, continue to progress. And do they stick. Yeah. Or do they. Right. Do they stick? Do we see kind of a restart of what we saw at the beginning of April, which really none of us want. None of us want that. Yeah, actually, the competitive takeaways aspect of it, that's actually very exciting. That's really good news. I'm happy to hear that. That is, that's very good news. Maybe just one quick follow up to one of your answers to an earlier question was about some of. There are OEMs that maybe do all of their own manufacturing internally today, whether it's across multiple facilities or within one region in particular. Now they're looking to diversify. Are there opportunities for you to go in and acquire a customer's manufacturing facility and then kind of leverage that capacity? Or are these not. Is this not something that, you know, from a capital return strategy, you know, makes sense for you guys? I mean, we've done operate in place and we're okay with lift and shift. I mean, I don't want to, I don't want to acquire a factory and pay a premium on it. You know what I mean? We wouldn't really do that, but we have, we've jointly invested with a customer. We've also taken things over, but we're pretty sensitive. Like, if you tell me, hey, can you take over this factory that's in, you know, Louisiana, and I've got no facilities, no infrastructure, and I'm just going to ultimately look to move that to Huntsville, why would I do that? You know, if it happens to be in a footprint where I'm at and I can leverage a team that I've got there, you know, I think we're open to that discussion. What I was reflecting is really more, you know, I'm an OEM maybe mid market, but I'm building all in my own factory in Indiana. You know, I'm now contemplating tariffs on components of material coming into my factory in Indiana that may come from Taiwan, Singapore, China, Malaysia. Now I'm thinking, okay, now I got to pay the tariffs. I'm still building in the U.S. I can't move the whole supply chain, so what do I do? You might say, if I was building in Mexico, I could assemble, if it's the right HTS code, and I could bring it in the country without a tariff. Okay, that may be. Maybe it's time to think about outsourcing. Okay, perfect. That's kind of how we're thinking about it. Yeah, that's excellent. Thanks so much, Jeff. Thanks everyone. I appreciate it. Thanks. Next question is from the line of Jim Ricchiuti from Needham & Company. Your line is now open. I just wanted to go back to the comments about Penang, just remind us of the timing of that, that ramp. I know the building is just getting started, right? Yeah. This is the groundbreaking that we did in the first quarter we talked about on the call. That is our fourth facility there. It is a brand new facility. It is going to give us more vertical integration on the island and it is going to be exciting because, you know, we can go from complete frame build, you know, and do painting and a whole host of other things along with a bunch of clean rooms. We are obviously big in production already in Penang and we are seeing, as reflected in our 18% growth in the first quarter, nice growth across several OEMs there. We have got one particular OEM that is kind of new to us there that is ramping nicely. We look for us to continue to grow year-over-year in Malaysia. The new facility really will not be fully online until next year, but the investment is really going in this year and that is really with an eye towards, you know, that we are going to continue the momentum and that Semi, the Semi market, while it might have its fits and starts, and this has been unprecedentedly different recovery, we are still long in the space and feel like we have a differentiated value proposition there. You know, we are investing long term. I do not want you to think that new buildings are required for us to be able to grow because, you know, in the last down cycle, we freed up quite a bit of capacity. I should also remind you we opened a brand new building in September of last year that was building three, so that is now fully online. That gave us more headroom. This is just building four that we started building in January in first quarter this year. This building four will be exclusively for Semi-Cap customers. It won't be exclusive, but we're certainly starting there. We do see an opportunity for doing Medical and, you know, other aerospace machining. Right now the wind pipeline is pretty heavily dominated towards semi. Got it. You'll have the flexibility depending on what happens. Yeah, it's not an exclusive semi factory percentage. Just lastly, Jeff, I feel like I've heard you mention M&A the last couple of calls and yeah, I don't want to make more of it than it is, but just is that geared toward potentially looking at expanding in one vertical or is it adding some technology capability? Is this presumably, are these more tuck-in type that you consider and how active is this? There is just a, I think with, it's interesting there's a lot of private equity firms that have been invested in manufacturing for six to eight years. I think every week there's a couple opportunities that kind of come to us and cross our desk. You know, we've said we're going to be very picky and disciplined. There are some areas that we might say, look, this could fill a gap for something that, where customers have an interest and not. We continue to believe there's plenty of organic opportunities. It's not like M&A is pressing us, but we do think it could augment the strategy. As we brought inventory down and created some capacity, it's something that we can certainly look at. We're really sensitive to dilution and want to do things that can be accretive in a fairly short period of time. We're not at this point looking to expand into necessarily a new sector than the five that we support. We will look at, you know, where can we enhance capabilities in high value add areas in our portfolio. Okay, thank you. Sure. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by the number one on your touch-tone phone. If you'd like to withdraw from the polling process, please press star then the number two. If you are using a speakerphone, please make sure you lift your handset before pressing any keys. There are no further questions at this time. I'd like to turn the call over back to Paul Mansky for closing comments. Sir, please go ahead. Thank you, Constantine. Thank you everyone for participating in Benchmark's first quarter 2025 earnings call. We will be participating in the Sidoti Small- Cap Virtual Conference on June 11. For updates to this and other upcoming investor conferences and events, please check the Events section of our IR website at ir.bench.com. With that, we thank you again for your support and look forward to speaking with you soon. This concludes today's conference call. Thank you very much for your participation. You may now disconnect.