My name's Simon Blank. I'm a Managing Director on the Aerospace and Defense investment banking team here at Jefferies, and I'm pleased to be here with the TTM team. I'll let them briefly introduce themselves. We're going to have a fireside chat about the business trends, what we're seeing, and also have time for some questions from the audience as well. So be thinking of those as we chat. Without further ado, Edwin, I'll turn it over to you to quickly introduce yourself. Sure, sure. Cathie, and then go. Sure, sure. Let me start with Cathie. Cathie. Well, great. Thanks, Edwin. I'm Cathie Gridley. I'm Executive Vice President and President of TTM's Aerospace and Defense business. Joined TTM in 2019 and have been running the A&D business, which is now just over $1.5 billion since January of 2020. Yeah. Edwin Roks. I'm the President and Chief Executive Officer of TTM since a year. My background is 20 years Teledyne. I think most of you are familiar with that company. Last two years as Chief Executive Officer, and before that, 15 years Philips. You hear my bad accent. I'm originally Dutch, and a pleasure to be in TTM. I think we have a great trajectory in front of us and already demonstrated over the last year, I'd say. Great. Well, maybe we'll start at the beginning. TTM's very much transformed from a PCB manufacturer into an integrated, broader specialty electronics platform. Maybe you could just give a sense for the business Yeah And the core value proposition. Yeah, sure. Again, although PCB sounds a bit old-fashioned, it is not at all. We will not abandon, let's say, the PCB trajectory. PCB, again, I am a simple semiconductor guy. I am used to five metal layers. In the PCB area, we do 150 layers. We do a lot of layers, so it is very complex. Our roadmap goes in different directions. Our strategy is going in different directions. First of all, coming from the PCB side, we do more heterogeneous packaging, very complex packaging, very compact packaging as well. Then using, that is the other axis, using this type of packaging, this type of integration, to make very nice modules, subsystems, and systems. That is basically what we do. Then you see our geographic expansion into Europe, so we will be also a global player. That is another thing to that. Yeah. Good. 80% of the business today is aligned with megatrends, right? Correct. In terms of AI and aerospace and defense. Yeah. We were in New York in May, where we presented at the Nasdaq. If you look at our strategy, it is basically riding that wave of data centers and networking, and then at the same time building up all these other nice businesses. Sometimes we do a few acquisitions. You saw the recent acquisition of Epiq, which is a very nice one, but also you see some expansion in Europe, and it will not end there. Yeah. Well, since you mentioned it, let's jump to Epiq for just a moment because it Sure It definitely is a marker on that transformation from PCB Oh, yeah To electronics. Maybe for you, Cathie. Sure. Help us understand the strategy, vision, and fit of Epiq. Oh, happy to do that, Simon. The Epiq acquisition actually has been on our radar, pun sort of intended, for some time. We did the acquisition of a company called Telephonics in 2022, and with that business, we acquired a mission systems capability, including communications. We knew that the communications capability in that business was a bit more mature and would need modernizing. In 2022, an event occurred, Veritas acquired Epiq, and that put Epiq on our radar as a business that we were going to be keen to watch, knowing it would come out about now. That timeline has worked very well for us. Epiq brings to us a very modern, very cutting-edge, forward-leaning capability in software-defined radios and strong comms capability and brings us additional RF spectrum capability, which when married with our preexisting RF, gives us the full spectrum of RF capability for our customers. It rounds out our sensors capability and our comms capability in a very nice way. Once it closes, we will have a lot of opportunity with Epiq's open architecture and their commercial capability to blend that with our own capabilities and broaden our opportunities. Oh, yep. It is very much a system or subsystem level business. And you also do component level work in the defense electronics business. How do you think about kind of going all the way soup to nuts from components up through integrated systems? Well, the interesting part about our model is we actually go from the board, right? So if you think about electronics, it's the PCB or the interconnect technology is the foundation of all electronics. It enables everything above the board. So the strategy that we've been able to deploy is our longstanding capability in higher technology interconnect solutions, so PCBs all the way up through to mission systems, which is where we already reside today. So we have a very strong radar capability and AESA capability, a strong sense and avoid capability, and identification friend or foe capability at systems level, and then everything in between now. And yes, Epiq Solutions does bring that subsystem capability to us, which was a key part of our strategy. Yeah. And the business grew, the defense business grew mid, sorry, mid-double digits, right, in the most recent quarter. Backlogs up materially. Are there any mission areas or certain areas that are particularly driving that growth or that you're excited about for the next few years? Yeah, the growth trajectory for A&D is quite strong. We are seeing a very strong demand signal, and that is because our A&D business is aligned with the programs, in particular with the Department of War, where the funding is going. Air and missile defense, munitions acceleration, Golden Dome, and restricted programs are all areas where we are seeing very good acceleration in that demand signal. When we think about how we are aligned and the customer relationships we have, we have strong relationships with the primes, so platform and prime defense contractors, but we also are building very good relationships with the emerging new players in that arena as well. Yeah. Your total pipeline of 7-ish billion- Right? How different is it, the new players relative to the Northrop Grumman's or the Lockheed Martin's, the established primes? You mean in terms of- In terms of the way that you interact Oh In the sales cycle and the way that you have to be nimble as they They are very nimble. They want to accelerate to market. They are accelerating to market, and they are changing the landscape, I think both with them as emerging players in the defense industry, as well as the behaviors and the changes within the primes themselves. The whole industry needs to be moving more quickly, needs to be more agile. A company like TTM, we have been in the business of getting products quickly to market for a long time. When you marry that up with our integrated electronics capability, we are seeing a lot of interest in TTM's ability to take on more of the package, more of that integrated electronics, and to be more agile. It is working very well, and we are getting a lot of interest from those neo-primes. Yeah. Great. Another topic we've talked about in many of these meetings is the framework agreements for missiles and munitions. Which I know you have good content on. Where are we in the cycle of that sort of framework agreement turning into revenue and growth? Well, so within that $1.7 billion backlog, we already have some good momentum on certain programs, certain missile programs, and we are also now seeing accelerated demand signals, for what we anticipate will be the kind of ramp that's being signaled by the Department of War. What we're seeing is, there's a lot of talk about multi-year contracting and multi-year opportunities, which is a bit of a change for the Department of War versus that sort of one-year contracting cycle. We're seeing that now, and we are preparing for that, and the demand signals are quite strong. It still is dependent on the DoW's acquisition organization and the timing of that, so we watch that carefully. Yeah. Great. I know Cathie and I could talk aerospace and defense the whole time, but I know that's only 40% of the business. No. In the other markets, Edwin. Sure What are some of the things you're excited about? Obviously, we should talk data center and AI and the way that you're riding there. Sure Beyond that, some of the instrumentation and other pieces. Oh, yeah. Of the portfolio I want to make sure you. One market and one business which excites me a lot is the medical business, of course. I must say, which is Swiss Technology Group AG acquisition, the capabilities of that group doing pacemakers, doing all kinds of, let's say, very sustainable products is a great thing. This is more miniaturized. This is, of course, very smaller PCBs, a lot of flexible PCBs, but it's exactly what we need to do. It's a long cycle business. This is just one of the eight end markets. We're in instrumentation, we're in industrial. We're even in automotive. There's a good link between automotive and robotics. We're in all these end markets which mean a lot, and I'm sure you want to talk about data centers and networking as well. Yeah. Yeah. Let's stay on data centers and networking, because that's- Yeah Been just tremendous growth over the last few years. Yeah. It doesn't show any signs of letting up. No, I don't think that will happen soon. We're very close to our customers. Again, we cannot disclose our customers. We have very strict NDAs with them. But these are the big guys. These are the big guys you read in the newspaper every day, correct? 10, 15 of these big customers, and then a tail of another 50. Which is helping us to understand the landscape, to understand what are the trends. It's so nice that some of these multi-layer technologies, let's say, where you do 150 layers, where you do N+M, which is a new technology, only the first generation of that new technology trend, is working out very well. We're ramping up. On this new technology, we do another $200 million this quarter, and then next quarter, another $400 million, and that will grow nicely. The good thing is also with TTM, that all of these technologies and all of these end markets will feed into, let's say, Cathie's aerospace and defense business. Yeah. Of course, the other way around is more difficult. We have these firewalls. But that's a nice thing with TTM. Yeah. Yeah. Of the 80% that's AI and aerospace and defense- It's split pretty evenly right now, right, between AI and A&D. Yeah. What do you see as the longer term for that? Oh, yeah. If you look at, let's say, and we are in the middle of our strategic planning, and we ask ourselves the same question. You asked about five years. We ask ourselves about seven years, because we have to how we will look like at seven years. I can only emphasize that we are indeed coming from a traditional PCB company, but we have to find another word for PCB because it looks old-fashioned, and it's absolutely not. We're moving into, let's say, a more, I would say, communication and sensing company, and that's what's happening. Maintaining, let's say, our nice footprint into PCB and interconnect. That's where we are going. The exact split between all the businesses is something we have to see. If you look at how fast data centers and networking is growing right now, it will likely get aerospace and defense to a 30% portion. Now it's 40%. But who cares, because the business is growing nicely in double digits, and it is very sustainable. Yeah. That is good. Yeah. Yeah. And what about inside the four walls of your organization with AI? How are you using AI to change the way that you operate internally in both those end markets? Let me ask Cathie to give some product examples. Yeah I will give some, let's say, more manufacturing examples. Go ahead. Yeah. From a systems perspective, we've invested some R&D funds into applying AI within our systems capabilities. More maybe on the machine learning side, where we've got some applications that are in development to help pilots, for example, with what they're hearing on an aircraft or some of the detection capability in a very broad field of, say, a swarm of drones that may be coming at you and how we're applying AI to interpreting all the signals and messaging that may be coming from that. We have a group of really talented engineers who are taking AI and the tools that are available and also incorporating that and weaving that into actually a system solution. That's the product side on the A&D side. Yeah. On the manufacturing side, maybe two examples. One of them is a workflow. Exactly the path, how this PCB should go into that facility. That's the thing where AI works a lot. The other thing is inspection. Think about PCBs. Sometimes they are very big panels, correct? You have to inspect them. You have all these thousands of holes, 10,000 holes you have to inspect, making sure they are solid. That's something what a human being can do, but you can only do maybe two, three per day. AI can do this all the time. That's another way where AI helps. Yeah. You'll see meaningful benefit from cycle times, turnaround times. Exactly Quality. Exactly. That's right. Yeah. Things like that. Yeah. Yeah. That probably comes out in margin. If we transition to execution, right? Exactly. Again, the best example of AI is basically, yes, we are doubling the business. We have now 20,000 people. In a few years from now, let's say if we double the business, we will not have 40,000 people. We need AI basically to help us in that sense. That's going well. Yeah. Yeah. How do you think about the margin opportunity for the business going forward? I think latest quarter was 16.5%. Right. Where is it headed in ROI? For this year, we guided to the 18%. Yeah. This margin, I can tell you, margin will go up. Margins will go up. You know my background. I am used to, let's say, also on the module side, typical margins. I do not see any reason why these margins cannot go up over the coming years. Part of financing that growth is investing in capacity. Yeah You guys have made meaningful investments so far and commitments to continue to invest in that capacity. Yeah. Describe what you are seeing and how you are thinking about that expansion. No, but let me partly answer and then hand it over to Cathie, because she's giving really good answers. The thing is, we do it in a more, I would say, in a disciplined way. When we see growth in, for instance, now our Ampleth, we do it in a disciplined way. We do a $50 million investment here and $100 million there. You don't see us a lot in, although we did it, and Cathie can give an example there with Syracuse, and we have examples with Penang in Malaysia, where we did greenfield, but we love brownfield. We love, let's say, a building which is next door, which we can use, "Hey, that was an empty building," and now we put all these drill stations. We demonstrated that in a few pictures at the Nasdaq, how that works. That's a disciplined way. We can follow the demand cycle very carefully. That's our approach. Yeah. I think that when we're looking at capacity, in North America, in the U.S., we have 16 facilities that are dedicated or largely dedicated to defense. As we look at, for example, the need to ramp capacity for munitions acceleration or in anticipation of Golden Dome, it's as Edwin says. We look at the facilities, and it's about, one, increasing the technology, and everything that we're doing is becoming more and more challenging to build, higher layer counts, higher densities, but it's still using the same know-how and the same capability of running a board, for example, around a track. We may run it around multiple times. We have to add pieces of equipment to expand the capacity within that footprint, but it's a measured approach. Capacity is not going to be a constraint for us. We have a very disciplined approach to how we're adding capacity. We did add greenfield in Syracuse for ultra-high density interconnect. That was bringing a capability to the United States. Yeah. That was bringing a capability for production volumes of UHDI. That is different than, say, the expansion of a brownfield or an existing facility for capacity. Necessary, but not as required as what we will see when we expand capacity for the likes of munition acceleration and Golden Dome and other defense demands as well as commercial requirements. Yeah. Maybe tell us more about the ultra UHDI. And how, because it is critical technology. Sure And it is exquisite technology, right? Mm-hmm. That's right. It is not old PCB as Edwin Roks was saying. Maybe elaborate on that a little bit. Sure. First of all, just to dispel any myths. UHDI, ultra-high density interconnect, is not a new technology. It's been built in Asia for quite a long time, and there is a strong capability there. What is new is the application of that capability in defense and defense systems, and that has to be done here in the United States. What does it do? It's high density, so smaller lines and spaces. It fits a lot more capability from a circuitry perspective and from an overall capability into a printed circuit board. The reason why is that more critical, everything is getting smaller. Everything needs to be packaged tighter, so size, weight, and power is critical. When you think about this ultra-high-density interconnect capability in a defense way, it enables higher functionality in a radar system, for example, or a smaller form factor package that might go into a lighter weight aircraft. Yeah. Are you seeing a lot of that in the neo-primes that you are supporting in terms of putting processing at the edge and sensing at the edge? Is that a key enabler for that? A lot of the work that we do related to the UHDI is in the restricted domain, so we do not talk a lot about exactly what those applications are. But I will say that we have had a lot of new interest from neo-primes in terms of that technology and how it would be applied into the systems they are developing. Yeah. And that originally came through an acquisition, right? Or a facility acquisition, some of the UHDI stuff, and never mind. No. The way it worked was, we had a preexisting facility in Syracuse, which came from the Anaren acquisition in 2018. That facility is on the integrated electronics side of our A&D business. So, think RF capability, microelectronics, microwave capability. We found a suitable greenfield, literally a greenfield, and it was right next door, so allowed us to optimize the engineering know-how that we have in the existing facility, and we went from greenfield and within 23 months, I handed the keys over to operations so that they could go into production. Great. Yeah. In general, what you see is basically that Moore's law is getting to an end. It's very difficult to make chips more complex. What we provide is, let's say, combining these chips. That's why we like to call ourselves the nervous system. Nervous system, combining these chips in a very efficient way with low latency and high bandwidth. That's basically what we do. Great. Any questions from the audience that you'd like to contribute? Otherwise, I'll ask another. I'll ask about book to bill, because you're seeing a lot of momentum right now in terms of the order book relative to revenue. What should we be expecting in terms of where that's headed? Let me maybe talk about the commercial and hand it over to Cathie. The book to bill is healthy. It is extremely healthy, and especially in Q3, Q4, it is all about in the commercial side about execution of Ampleth. That is basically what is happening. That is going very, very well. Yields are on track. The sites are doing an amazing job to get that going. So the book to bill, yes, we will bill everything. And of course, we continue to book. So that is a healthy number. On the defense side, I think we never had these numbers we have now before. Never happened before, so I will let Cathie talk about that. Yeah, I think that is fair. So usually, so I have been running A&D businesses for many years. You always want it to be over one, right? So, it is a longer cycle business, and you want to see your healthy continuation book to bill over one. I think our book to bill Q2 was 1.3, which is pretty exceptional. Now, the important thing though, is it is also multi-year, right? Which is one of the really good benefits of a healthy A&D business, right? So it is not an indication of a short-term pop. It is we are seeing longer multi-year, call it 2.5, three years in some cases, orders coming through, which is a great indicator and really helps us with the supply chain. So we have a $1.7 billion backlog, and we have a very, very healthy pipeline. And that is growing. The demand signals are very strong coming from the defense industry. On the flip side, are there any supply chain constraints that you are watching that would temper your ability to deliver? We are focused every day, every hour on the supply chain. If you look at, let's say, and this is, let's say, almost a full-time job of our Chief Operating Officer. We follow, let's say, what's happening with copper. We follow what's happening with glass and making sure that we don't get tied here. So far so good. We are very transparent to our customers also. We explain what's going on. The good thing is, let's say, of course, we have multiple suppliers, and we are very close with these suppliers, like with our customers. The good thing is that these suppliers also focus more on the high-end, and that's exactly where we play. We don't see issues right now, but absolutely it's our focus every day. Yeah. Yeah. As you look out at the M&A pipeline ahead of you, are you focused on tuck-ins, more transformational deals, global expansion? If you could sort of write the script- Yeah What's your priority? No, it's always good to stick to your own strategy and, like we said, we want to be, let's say, continue to be the leaders in interconnect and doing that in a global way. What you will see is more acquisitions in Europe, for instance. Let's start with these two. We will do more in Europe. The other thing what Cathie also mentioned, let's say especially on the A&D side. Half of the A&D business is up the chain. We will do more on the communication and sensing side. We can expect more acquisition there as well, especially with capabilities we don't have in-house right now, but where we are very familiar with. That gives you hopefully some information. Yeah. Any other from the audience that you'd like to ask? No. All right. What does success look like for you over the next five years? Or seven years as you say, what do you think the milestones will be that- No Define that? Yeah. First of all, I think that whole transformation of the business is important. Maintaining, let's say, what we have now and growing that I think is a very important thing. Of course, we have our financial targets. If you see what we came from $2.9 billion last year to $4.4 billion this year. What we guided. We like to grow. We like to grow not only top line but also our bottom line. Our margin should work out very well. So financially, I think it's a very nice investment, TTM. The other thing is, what gives me, let's say, going is the workforce. It's very collaborative. There is no politics in the company. It's a very healthy company, and that's giving me a lot of energy as well. I think it's a great time to be part of TTM, and it's the right time to be part of TTM. We have the solutions for the future, and that's something pretty unique. You don't see that quite often. Nice. Any last questions? Yeah. Just on the data center side, just efforts to align better with hyperscaler roadmaps and create more custom solutions. Could you maybe- Oh, yeah. Give a sense of where you are with that progress? Oh, yeah. We do that all the time. By making sure you have the right technologies in place, the first thing what we do is align with our customers, and these are the multiple hyperscalers. We also like to show, let's say, demonstrators. I hate to go with only PowerPoints to our customers, yeah. We like to go with, "Hey, these are capabilities. This is something we can do." So alignment with these hyperscalers, by the way, with all our customers, yeah, is going very well. Anything else? So which business is your favorite? The A&D business or the AI data center business? She's biased. Let's ask her first. I'm just kidding. Thank you guys so much. Thank you so much. For taking the time this morning. We'll let you get to the elevators. Okay. For everybody else on the way back up, but thank you all for joining us today. Thank you, Simon. Yeah. Thank you, Simon. Thank you very much. Thank you. Yeah.