Good afternoon. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the Sanmina Corporation's First Quarter Fiscal 2019 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

[Operator instructions] Thank you. Ms. Paige Bombino, Vice President of Investor Relations, you may begin your conference..

Thank you, Rob. Good afternoon, ladies and gentlemen and welcome to Sanmina's first quarter fiscal 2019 earnings call. A copy of our press release and slides for today's discussion are available on our website at sanmina.com in the Investor Relations section.

Let me remind everyone that today's call is being webcasted and recorded and will be available on our website. You can follow along with our prepared remarks in the slides provided on our website.

During this conference call, we may make projections or other forward-looking statements regarding the future events or future financial performance of the company. We caution you that such statements are just projections.

The company's actual results of operations may differ significantly as a result of various factors, including adverse changes to the key markets we target, significant uncertainties that can cause our future sales and net income to be variable, reliance on a small number of customers for a substantial portion of sales, risks arising from international operations, and other factors set forth in the Company's annual and quarterly reports filed with the Securities and Exchange Commission.

You'll note in our press release and slides issued today that we have provided you with statements of operations for the quarter ended December 29, 2018, on a GAAP basis, as well as certain non-GAAP financial information.

A reconciliation between the GAAP and non-GAAP financial information is also provided in the press release and slides posted on our website.

In general, our non-GAAP information excludes restructuring costs, acquisition and integration costs, non-cash stock-based compensation expense, amortization expense, and certain other infrequent or unusual items to the extent material.

Any comments we make on this call as it relates to the income statement measures will be directed at our non-GAAP financial results.

Accordingly, unless otherwise stated in this conference call, when we refer to gross profit, gross margin, operating income, operating margin, tax, net income, and earnings per share, we are referring to our non-GAAP information. I would now like to turn the call over to Michael Clarke, Chief Executive Officer..

Thank you, Paige and good afternoon everyone. Thank you for joining the call today. With me on the call is Dave Anderson, our CFO. Before we get into the financial results for the quarter, I'd like to comment on announcement of Dave Anderson's plan to retire. Dave plans to retire on March 27, 2020 to spend more time with his family.

Dave will remain as CFO until a successor has been appointed and will stay with the company to facilitate a smooth transition. He has been instrumental to Sanmina 17 years and leaves behind an outstanding record as a corporate leader, finance executive and mentor.

He has played a significant role in driving financial and operational improvements across the organization with unwavering integrity and commitment to strong financial controls. On behalf of the Board of Directors, the executive team, I wish to thank Dave for his contribution to the company. Thank you Dave..

Thanks, Michael..

We have retained an executive search firm to find a new CFO otherwise it is business as usual and we will update you on the progress. I will now turn the call over to Dave to through our financial results, then I will provide an update on the business and our end markets followed by Q&A.

Dave?.

Thanks again, Michael and thanks for the kind words. I greatly appreciate them. Please turn to Slide 3. Overall our first quarter revenue and non-GAAP diluted earnings per share exceeded our expectations. Revenue exceeded the high-end of our outlook by $263 million ending at $2.19 billion.

Revenue was up 16.6% sequentially and up 25.4% from the first quarter of last year. Non-GAAP diluted earnings per share at $0.83 exceeded the high-end of our outlook by $0.09 and was up 40.2% sequentially and 72.7% over the first quarter of last year.

I will discuss our end market revenue, non-GAAP margin and non-GAAP diluted earnings per share performance in more detail in a few minutes. Please turn to Slide 4. From a GAAP perspective we reported net income of $38 million which resulted in diluted earnings per share of $0.54 for the first quarter.

This was up $0.53 sequentially and $2.70 from Q1 of last year. The $0.53 sequential increase in GAAP diluted earnings per share resulted largely from a $30.6 million non-cash goodwill impairment charge that was recorded in the fourth quarter of 2018 and negatively impacted GAAP diluted earnings per share in the fourth quarter by $0.43.

The $2.70 year-over-year improvement in GAAP diluted earnings per share was mainly driven by a non-cash tax charge in the first quarter of last year of $2.27 per share related to the U.S. Tax Cuts and Jobs Act. My remaining comments will focus on the non-GAAP financials for the first quarter of fiscal 2019.

At $151.2 million gross profit was up $27.4 million from the prior quarter. Gross margin came in at 6.9% which was 30 basis points higher than our final reported Q4 financials. Operating expenses were flat sequentially for the quarter at $65.4 million.

As a percentage of sales operating expenses were down 50 basis points to 3%, largely as a result of our ability to contain our costs while delivering a higher level of sales for the quarter. Operating margin was 3.9% which was up 80 basis points sequentially at the high-end of our outlook and up 120 basis points compared to Q1 of last year.

We made progress in Q1 toward our goal of getting our operating margins back to the 4% range as quickly as possible. Other income expense of $14.1 million was up $7.2 million when compared with last quarter and up $11.1 million from the first quarter of last year.

This sequential and year-over-year increase in OIE is largely attributed to increased borrowings on our credit facility needed to fund higher levels of inventory that is supporting our customer demand requirements as we work through ongoing supply constraints on certain component parts.

The tax rate for the quarter was 17.5% of pretax income which was slightly better than our expectations of 18% as a result of a slightly more favorable geographic distribution of our profits.

We earned $59.2 million in net income with our non-GAAP diluted earnings per share coming in at $0.83 which was above the high end of our outlook for the first quarter. non-GAAP diluted earnings per share were up $0.23 or 40.2% from Q4 and up $0.35 or 72.7% from Q1 of last year.

This was based on 70.9 million shares outstanding on a fully diluted basis for Q1. Please turn to Slide 5. I will now give you some color around our end market segments for the first quarter. Fiscal 2019 is off to a solid start with each of our end markets achieving double-digit growth on a sequential and year-over-year basis.

Communications Networks were $779.7 million or 35.6% of Q1's total revenue. This was up 13% sequentially and up 14.9% year-over-year. Industrial, Automotive, Defense and Medical was $1.18 billion or 54.1% of revenue for the quarter. This was up 18.3% on a sequential basis and up 33.5% compared to the same period a year ago.

Growth was solid across all four subsegments on a sequential and year-over-year basis. Cloud Solutions consists of cloud computing, storage systems, point-of-sale, casino gaming and set-top boxes. This segment was $225.8 million or 10.3% of revenue in the first quarter up 20.9% sequentially and up 25.3% compared to the same period a year ago.

Sequential growth was largely driven by shipments to our new tier 1 cloud service provider that continued to ramp during the first quarter.

A contributor to the sequential and yearly growth across a number of our end market segments was a slight stabilization of component lead times and our team's ability to partner with our customers and suppliers to satisfy our customers' pent up demand requirements. Please turn to Slide 6.

The Integrated Manufacturing Solutions segment represents printed circuit board assembly and test, final system assembly and test, as well as direct order fulfillment. As you can see from the graph on the left, the IMS segment revenue was up $239 million from last quarter at $1.79 billion.

Our gross margin was down 10 basis points to 6.2% compared to the prior quarter. The full profit contribution flow-through from the increased revenue growth in this segment was partially offset by the timing of the collectibility of certain tariff costs as well as the collectibility of other expected cost recoveries from our customers.

On the right is our second segment, Components, Products and Services. Components include printed circuit board fabrication, backplane assemblies, cable assemblies, enclosures, precision machining and plastic injection molding.

Products include computing and storage products, defense and aerospace products, memory and SSD modules, as well as optical and RF modules. Services include design and engineering as well as logistics and repair services.

In aggregate, the revenue for this segment was up $74 million to $456 million with gross margin up 230 basis points from Q4 to 8.9%. The sequential CPS segment gross margin improvement was mainly attributed to a $12.5 million non-cash older period adjustment booked in the fourth quarter of fiscal 2018.

This adjustment related to upfront contract cost within one of our Products businesses that were capitalized in the inventory and had accumulated during fiscal 2016 through the third quarter of 2018. Please turn to Slide 7. Here we are showing you the quarterly trend in our key non-GAAP P&L metrics.

Revenue was up 16.6% from last quarter and up 25.4% over Q1 of last year to $2.19 billion. Gross profit increased 22.2% from last quarter to $151.2 million. Gross margin of 6.9% was up 30 basis points from last quarter.

Our operating profit increased 46% from last quarter to $85.8 million, this leg to operating margin of 3.9%, an 80 basis point improvement compared to Q4.

We saw an improvement in our operating margin in Q1 in line with our expectations, but this was not in line with the expected contribution margin flow-through on the incremental revenue we shipped in Q1. We continue to drive toward our goal of getting operating margins back to the 4% range as quickly as possible.

non-GAAP diluted earnings per share grew 40.2% sequentially to $0.83. The 40.2% sequential improvement resulted from the increased volume and cost containment in Q1 as well as the negative impact of the older period adjustment on non-GAAP diluted earnings per share in the fourth quarter of 2018. Please turn to Slide 8.

Our balance sheet remained strong. Our cash and cash equivalents were $409.3 million at the end of the quarter, cash was down $10.2 million from the previous quarter, accounts receivable was up $167.3 million, contract assets were $419 million and inventory was down $319.8 million. We'll talk more about contract assets and inventory in a moment.

From a liability standpoint we had a $15.5 million decrease in accounts payable during the quarter. Our short-term debt was up $115 million from last quarter to $708.4 million. Our short-term debt includes the $375 million notes due in June 2019 that are classified as current on the balance sheet.

On November 30, we amended our $500 million secured revolving credit facility to provide for fully committed $375 million secured delayed draw term loan which can only be used to fully satisfy the company's 4.375% senior secured notes that are coming due in June 2019.

The revolving commitments under this amended credit agreement expire on November 30, 2023. In conjunction with the setting up of this term loan, we have entered into forward interest rate swap agreements that effectively convert our variable interest rate obligations to fixed interest rate obligations through December 1, 2023.

Through December 29, 2018 we had entered into interest rate swaps with an aggregate notional amount of $200 million that had an effective interest rate of approximately 4.5%. In the first quarter, we repurchased approximately $7 million worth of common shares.

Specifically we repurchased approximately 273,000 shares at an average share price of $25.68. We have approximately $101 million available under our Board authorized repurchase plan that is subject to compliance with our debt covenants.

As of the end of the quarter we had $14 million in long-term debt and our gross leverage was approximately 2.2 based on our total debt. Overall, our balance sheet and capital structure remain in great shape. Please turn to Slide 9. Here we are showing you the quarterly trend in our balance sheet metrics.

Cash was consistent with prior quarters in the $400 million range. Cash flow from operations for the quarter was a usage of $78.4 million. Net capital expenditures for the quarter were $36.6 million which was down from the same quarter of last year and slightly below our expectations for Q1 of this year.

We ended the quarter with negative free cash flow of $115 million which was down compared to the prior quarter and missed our expectations. Our cash generation for the first quarter was negatively impacted by the continued buildup in our contract assets and inventory to support our customers' requirements during the supply constrained environment.

In the upper right quadrant we are showing the trend in inventory turns and dollars with the first quarter of 2019 shown on the old versus new basis. As I mentioned on last quarter's call, Sanmina adopted the new revenue recognition standard referred to as ASC 606 on a modified retrospective basis.

As I previously indicated, we did not expect the adoption of ASC 606 to materially impact our revenue or earnings per share which was the case for our first quarter of 2019. However, ASC 606 did have an impact on our balance sheet.

With the recording of revenue on an overtime basis for the majority of our non-product revenue stream, we are required to reflect work in progress and finished goods inventory along with a profit element as contract assets which is essentially unbilled receivables.

As a result, at the end of Q1 we had $419 million of contract assets and a $1,054 million of inventories on our balance sheet. For comparative purposes from an inventory turns perspective we have provided the inventory turns calculation for Q1 under the old methodology and the new methodology.

As you can see, our inventory dollars under the old methodology were up $69 million sequentially to $1,443 million and our turns were basically flat at 5.6 times. Inventory continues to be a challenge largely driven by ongoing material shortages on certain commodities such as resistors, capacitors and discrete semiconductors.

While we saw a slight stabilization of lead times during Q1, lead times are still extended compared to a normal market. As we indicated on our last call, we still anticipate the supply environment will remain constrained at least through the first half of calendar 2019 and possibly throughout 2019.

We continue to work with our customers to better understand the demand outlook so that we can plan for the requirements with our suppliers.

Our supply chain organization has done a good job partnering with our customers and suppliers to secure constrained parts to help meet our customers pent-up demand requirements which was instrumental in our ability to ship $263 million above the high end of our guidance despite the supply constrained environment.

We will continue to work with our customers and suppliers to maximize the fulfillment of our customers demand while also working on addressing our elevated inventory levels and the impact on our cash flow.

We also expect to continue to make improvements in our operational efficiencies and materials execution in the areas we can control in spite of this supply constrained environment. In the lower left quadrant we are showing cash cycle days which combines our cycle time for inventory, contract assets, accounts receivable and accounts payable.

Overall based on the old methodology cash cycle time was basically flat sequentially at 47.1 days which was largely driven by a reduction in accounts payable days outstanding that was driven by unfavorable supplier payment terms mix and was offset by a reduction in inventory days and day sales outstanding was driven by the higher sales volumes in Q1.

Finally, pretax ROIC increased by 6.6 percentage points to 24.2% from the prior quarter. Compared to the first quarter of last year, pretax ROIC improve 9.3 percentage points. Please turn to Slide 10. I will now share with you our outlook for the second quarter of fiscal 2019. Our view is that revenue will be in the range of $1.9 billion to $2 billion.

GAAP diluted earnings per share will be between $0.59 to $0.69. This includes estimated stock-based compensation expense of $0.11 per share. On a non-GAAP basis we expect the gross margin will be in the range of 7.1% to 7.6%. Operating expense should be $67 million $69 million. This leads to an operating margin in the range of 3.7% to 4.1%.

We expect that other income and expense will be in the range of $10.5 million to $11.5 million and our tax rate should be around 17.5%, and we expect our fully diluted share count to be around 71.5 million shares plus or minus half a million shares.

When you consider all of this guidance, we believe that we will end up with non-GAAP earnings per share in the range of $0.70 to $0.80. For your cash flow modeling we expect that capital expenditures will be around $40 million while depreciation and amortization will be around $30 million.

We expect net capital expenditures for 2019's fiscal year to remain in our most recent historical range of $110 million to $120 million.

We expect to generate positive cash flow from operations in Q2 as we continue to drive better materials planning and execution partnering with our customers in this supply constrained environment that is expected to lead to a reduction in our investment in working capital. Overall we delivered solid results in the first quarter of fiscal 2019.

Our revenue exceeded our outlook and was up 16.6% sequentially. We were at the high-end of our outlook on operating margins of 3.9% and non-GAAP diluted earnings per share of $0.83 exceeded the top end of our outlook by 0.09.

We don't typically provide full year guidance; however, given the continuing supply constrained environment and our solid results in the first quarter, some of which was driven by pent-up demand, we feel it is important to provide you with our view on fiscal 2019's full-year sales growth.

Based on our current pipeline we are cautiously optimistic that fiscal 2019 revenue will grow in the low teens. We will continue to focus on our operational execution, productivity and cost structure that will help drive us back to the 4% operating margin range as quickly as possible. I would now like to say a few words about my retirement plans.

Deciding to retire is not an easy decision. While I've spent the last 17 years of my life working with and supporting the Sanmina family it is now time for me to start the next chapter in my life and focus more of my time on my other family. I have thoroughly enjoyed my career at Sanmina.

Sanmina has come a long way since I first joined the company back in 2002 and it has been a privilege to work alongside such a talented and dedicated Sanmina team over all these years. I think Jure, Michael, Sanmina’s Board and all of Sanmina’s employees both past and present for all their support during my tenure at Sanmina.

I am fully committed to ensuring an orderly transition to the new CFO. And I'm confident that the Sanmina team will continue to create value for its customers, suppliers, employees and shareholders under Michael's and Jure's strong leadership. I will now turn the call back over to Michael to further comment on our outlook for 2019..

Thanks Dave. Good job. As Dave mentioned, we delivered solid financial results for the quarter. We had a real good quarter with revenue of $2.19 [ph] billion. The team did a great job in relieving some of the pent up demand from my customers for the components supply and then quickly converting them to products and shipments.

Our operation margin was strong, but we have still work to do to get it to our goal of 4% plus. We have all hands on deck to make this happen. I'm a little disappointed on the [indiscernible] but we’re aggressively working this down on many fronts.

And for sure we are really happy with an EPS of $0.86 per share sequential and year-over-year double digit growth in all other markets. Going forward, I'm excited about the opportunities ahead of us. We are focused on growth markets with higher complexity and higher value-added products.

These are the areas where Sanmina can differentiate from its peers. Operational excellent remains a priority for us. It translates into profitability and cash generation. Our pipeline is strong and we continue to foster our relationships with our customers and participate on exciting programs driving growth and stable stability in the future.

Please turn to Slide 12. David provided some comments about the overall outlook for the company. Now I'd like to provide some more additional color around the end markets and that gives us some confidence in our ability to achieve our second quarter outlook and growth in fiscal year 2019.

Communications Networks, which is made up of wireless network and optical products was 36% of our total revenue over 13% sequentially and 15% from the first quarter in the prior year. This exceeded our expectations as we were able to source and procure components needed to build and ship products.

Our customer demand remained strong in the Communications Networks area as mobile broadband drives growth coupled with the rollout of 5G in 2019 and beyond. We expect this quarter to be somewhat down based on the typical seasonality plus coming off a very strong first quarter.

Industrial, Defense, Medical and Automotive was 54% of our total revenue up 18% sequentially and over 33% from the first quarter in the prior year. These markets were all up double digit over the last quarter. We benefited from programs we won last year that are moving into volume production.

We continue to diversify within these markets and our customers are recognizing our capabilities and the value add we can provide them. We believe we are well positioned in the right markets for the long term. We expect the second quarter to be down timely coming off a strong first quarter.

Cloud Solutions was 10% of our total revenue up 20% sequentially and 25% from the first quarter in the prior year. This is up more than we expected as a result of Tier I customer program we started to ship and completed in the quarter. We're not expecting the demand to repeat, so we expect the second quarter to be down.

With all that being said, overall we expect to be down sequentially across all our markets. We are currently operating however at a higher run rate and expect to be up on a year-over-year basis. Operational excellence as I mentioned on last call is a major focus to optimize execution and operational consistency.

As you saw from our results in the first quarter we were able to expand our operating margin by 80 basis points to 3.9% and we are well on our way to our 4% plus goal. Our global supply chain organization did a fantastic job in clearing good components in the quarter and will continue this fine work.

We have an excellent footprint, global capabilities backed by one IT system, cost effective manufacturing solutions which we'll continue to improve on. This has enabled us to have a healthy pipeline with a positive book to build. We are optimistic about our profitable growth in 2019. Please turn to Slide 13.

In summary, Q1 was a great start to fiscal year 2019. We delivered a 3.9% operating margin and we'll continue to build on this. We have a strong demand across all end markets with a healthy pipeline. We have a good outlook for the second quarter, $1.9 billion to $2 billion and a non-GAAP EPS of $0.70 to $0.80 a share.

And as Dave outlined, we expect fiscal year 2019 to grow in low teens and we continue to make operation improvements as a part our overall financial performance and goals.

At this time I really wish to thank our employees for the great quarter and continued dedication to Sanmina to our customers for their support and to our shareholders for their continuous confidence in Sanmina. With this, operator I would like to open up the call for questions..

[Operator Instructions] And your first question comes from the line of Ruplu Bhattacharya from Bank of America. Your line is open..

Hi, thanks for taking my questions and congrats on the quarter and on the strong guide and also Dave congrats on a long and successful career at Sanmina..

Thank you, Ruplu..

So Michael, my first question is just talking about the Communications segment, can you give us your thoughts heading into the March quarter, maybe on the relative strength of wireless versus optical versus networking and you guys are strong in 5G build, so can you just talk about what you're seeing in terms of opportunities in 5G?..

Yes for sure. Well first of all generally speaking, as I said on the call is that a lot of the drive is being done by wireless broadband and when you start dissecting the market up, the wireless is linked to the broadband, is linked to the optical.

And, so when we look at it, we just see generally speaking, that the market is firing on all cylinders, every one of our customers. We've got in the 5G, we're doing prototypes, we're shifting preproduction and we'll be there.

We're on many of the new programs and we're going to be there ready as it really takes off for full production and those various reports when that will come to fruition but we are ready for this..

Okay, that's helpful. And then my second question is, you've guided fiscal 2019 revenues to grow stronger than we had expected at low double digits. In the last couple of years you've have had the linearity between first half and second half has been such that the second half has been stronger than the first half.

First quarter for you was strong and you're guiding 2Q as strong as well, do you think that linearity between first half, second remains and the second half can be stronger than the first half?.

Yes, I'll take that one Ruplu. So I think as we said through the call here is that in the first quarter of this year we did see a significant pent up demand that we were able to satisfy. I know that you know that we've been talking about this over a number of quarters that there is this demand requirement.

We've had a strong pipeline that we've been able to satisfy with the - by being able to get some of the supply constraints satisfied in terms of parts that our team did, so that helped us strongly in the in the first quarter.

As far as the rest of the year, we're – as we mentioned cautiously optimistic about getting into the low teens for the full year and so we're kind of looking at it at this point that way because we still see supply constrained environment has not totally put us, as I would say in golfing terms, out of the woods yet, but I'd say that's where we are now.

I don't know Michael if you want to?.

I think we've just got to get through this quarter and get a better idea and see how that, how it transpires, but obviously we feel what did you - we are cautiously optimistic..

Okay, that's helpful again. And then my last question is, can you give us your general thoughts on China, how levered are you, I think 20% of revenue comes from China, but I mean, are you seeing any slowdown there or just your general thoughts on the economy there and your opportunities in the Chinese marketplace? Thanks..

Yes, we don't see much change for us. Obviously there is some talk because of tariffs and people moving around, but we haven't seen much goal [ph]. I think everybody is sort of a little bit wait and see and see how it goes over the next six months. We feel pretty happy with where we are with China..

Okay, great. Thank you so much for taking my questions..

Thank you, Ruplu..

Thanks..

And your next question comes from the line of Jim Suva from Citi. Your line is open..

Thank you very much. Your outlook for 2019, again I think you said low teens growth, it's been looking back in history really not that strong.

So first of all, do you have the capacity for it or you're just going to run extra shifts or it seems like you have a CapEx which is pretty normal, how should we think about that? And then I guess more fundamentally, what really kicked in here to facilitate such growth, is it the 5G build out, is it optical, what really kicked in to allow this growth really to see multiple quarters of growth beyond what we just experienced this quarter?.

Okay, I think we said a couple times the pent up demand. We could have - in earlier quarters we could have shipped what we could've shipped if we'd have got all the components, so there is some pent up demand. With regards to your question capacity, we've been spending a lot time on operational excellence in this company, so we clean up capacity.

The CapEx that we buy is more efficient. We put in more automation and so it's sort of hard to compare to prior years. As we go we're getting better utilization. We've been more selective of the products that we put in different locations. So before we would have, before we were probably not selective of where these products went and now we are.

So all in all we think we're in a good position for this year to fulfill any sort of demand our customers throw at us, subject to getting all the components as we say. Going back to what I said earlier, our team we were ahead of the game a little bit I think.

Our team started really drilling down getting commitments from suppliers and I think we've seen some benefits to that in our global supply demand team..

Great and then last question, on your revenue by end market slide, Slide number 5 that's some very good detail about your year-over-year growth.

When we look ahead realizing that sequentially coming off such a strong quarter all the markets you forecasted to be down, which of those should be kind of up year-over-year, how should we think about, it seems like cloud will be a little more challenged from some one time purchasing but what about like Industrial which traditionally has been a lot more stable but you're seeing very strong growth there?.

Yes, I think the way we're looking at this with our guidance Jim, on the low teens is that if things play out as we expect that pretty much all of these end market segments we've got here should be up..

Great, thank you very much for the details..

You're welcome..

Thanks..

And your next question comes from the line of Christian Schwab from Craig-Hallum Capital. Your line is open..

Hey congratulations guys on a great start Mike.

My question is it relates to the pent up demand that we saw in the most recent quarter, is there any way to quantify what a modest loosening of some of the components led to in revenue, I mean was it measured in hundreds of millions?.

Well, I didn't really look at it that way. I would say the quarter was good not only because of the pent up demand. There were a lot of other projects I think we said in what I spoke about that we had a lot of new prototypes and not new eventually went to production its sort of hard to quantify that..

Yes, we haven't broken it specifically. We know by customer where we were being - where the pent up demand was coming from because we've been working with initially the supply base and then actually in tandem with the customers to get the part.

So we haven't gone and just quantified that between the two, but it was - we're trying to give you a sense for what was the predominant thing that we saw..

That being said, it was still you know even with the pent up demand, it was still a good quarter and even without that..

Yes, fabulous. Could you give granularity maybe by segment then where you, where the greatest pent up demand was in the supply chain, whether it was cloud or industrial or communications can you help us color there. I say that because your [indiscernible] that $780 billion. In my model doesn't go back far enough for me to see that number again..

I think, I mean again we haven't looked at it that way, but I would say probably communications probably was one what we had the more pent up demand and that would probably make some sense if you think about it..

Well, that was one area. We also did have it also in our industrial piece, but we were also ramping some programs as Michael mentioned that went to volume in medical or been going to volume in the medical. And the same thing as I mentioned on the earlier part, we did have the new Tier I cloud service provider that we were ramping through Q1 as well.

So in terms of the pent up demand it's probably Communications and most….

Yes, new projects..

Regarding the cloud server customer is that something that you anticipate to kind of haven't been evenly ramp or is that something that follows kind of typical cloud, data center builds which is very big and then kind of digest [ph] and then could be built again, how should we be thinking about that?..

Yes, I think you summarized it well for us. Yes, at typical cloud you get a big project and then goes away then you get another one and that sort of seems to how it works..

Okay, perfect, congratulations. Great quarter and good luck David..

Thanks Christian..

And we've got time for one more question..

And your final question comes from the line of Mitch Steves from RBC Capital Markets. Your line is open..

Thank you, guys for taking my question.

I just wanted to kind of clarify the largest segment you guys have and you guys kind of bundle industrial, medical, defense, auto, is there any way to kind of give us a little bit more of a breakdown of what you guys saw within those 4 segments in terms of what was growing faster and the others particularly since it was up 34%?.

Yes, we don't - as you know Mitch, we don't break that down specifically any further than what we've provided you here. I mean, as we've said on this call, we've given you some - through some of the other questions in the prepared remarks, some indication of what's going on in there, but we're not for various reasons breaking it down any further..

Okay and then in terms of the commentary of everything being up, is it fair to assume that all four of those top markets are also going to be up year-over-year?.

Yes, we - right now we would expect indications are that they would be up given what - given how strong our first quarter was..

Yes, I think so yes..

Got it. Thank you..

Thank you and welcome. Okay, folks thank you everybody for joining the call today and we look forward to speaking I guess in another three months and hopefully enjoy that call as well. Thanks a lot..

Thank you..

This concludes today's conference call. You may now disconnect..