Benchmark Electronics Q3 2009 Earnings Call Transcript

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2009-10-27 11:52:08.0

Tags: Capacity, Call Transcript, Electronics, Earnings, Supply Chain Management (SCM), Corporate Governance, Enterprise Software, Software, Business Operations, Corporate Law, Seeking Alpha, Benchmark Electronics Inc.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). Our first question then comes from the line of Alex Blanton with Ingalls & Snyder. Please go ahead

Alex Blanton - Ingalls & Snyder

Hi. Good morning.

Cary Fu

Good morning.

Alex Blanton - Ingalls & Snyder

I wanted to ask you about the components shortages. You are not the only one that seeing them and given the sales decline has been in this industry, what is the real reason for this? You think there would be a lot of spare component capacity at this point. So why are the retimes now stretching out?

Gayla Delly

Very good question. I believe that the answers too is that, during the downturn the economic environment was such that capacity was reevaluated throughout the extended supply chain and as that was done whether it was people or people and facilities...people facilities and equipment. Throughout the extended supply chain, you saw the actions we required to align capacity to demand and try to best alliance with forward-looking quarters with demand levels that were visible.

The strength in demand that we've seen returned first of all, has comeback within lead time which we've mentioned both last quarter and this quarter that we've seen probably not as much visibility as far out as we may see in a more normalize period. So the reaction has had to be very quick to response to the increased demand.

With that, not all of the capacity has been able to come up to speed as rapidly as it's needed to respond the end-customer demand. So, I think that we will see things aligned, again to the extent that it was people related, people will be brought back in to the extent that it was facility related that may take a little bit more time to restart some equipment is better. But I believe that a part of that will reconcile itself as headcount is brought back in or second, third shift whatever the case may be are addressed.

Alex Blanton - Ingalls & Snyder

But what kind of components are in the greater share to planning. Are we talking shifts, are we talking in other kinds of components or just what?

Gayla Delly

I believe it's somewhat across the board; it's hard to say everything is, that you are not seeing it solely in one commodity. You're seeing the make to order items with extended lead times of course, that's normal because of the complexity involved with make to order and may be potentially some of other training that's required for bringing back and some of the employees to support those types of items.

 

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