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00:06 Good afternoon, everyone, and welcome to the Benchmark Electronics, Inc. Third Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. Operator provided instructions. After today’s presentation, there will be an opportunity to ask questions. Operator provided instructions. Please also note this event is being recorded. 00:40 At this time, I would now like to turn the conference over to Lisa Weeks, SVP, Strategy, and Investor Relations. Ma'am, please go ahead.

00:50 Thank you, Jamie, and thanks everyone for joining us today for Benchmark’s third quarter 2021 earnings call. Joining me this afternoon are Jeff Benck, our CEO and President, and Roop Lakkaraju, our CFO. After the market closed today, we issued an earnings release highlighting our financial performance for the third quarter of 2021. And we have prepared a presentation that we will reference on this call. 01:14 The press release and presentation are available online under the Investor Relations section of our website at www.bench.com. This call is being webcast live and a replay will be available online following the call. The company has provided a reconciliation of our GAAP to Non-GAAP measures in the earnings release as well as in the appendix of the presentation. 01:38 Please take a moment to review the forward-looking statements advice on slide two in the presentation. During our call, we will discuss forward-looking information. As a reminder, any of today's remarks that are not statements of historical facts are forward-looking statements which involve risks and uncertainties, as described in our press releases and SEC filings. 02:00 Actual results may differ materially from these statements, most notably from the ongoing impact of the global supply chain constraint and the COVID-19 pandemic. Benchmark undertakes no obligation to update any forward-looking statements. 02:14 For today's call, Jeff will begin by covering a summary of our third quarter results including new program wins. Roop will then discuss our detailed third quarter results including a cash and balance sheet summary, and fourth quarter 2021 guidance. Jeff will wrap up with an outlook by market sector and a progress update on our strategic initiatives for the year, before we conclude the call with Q&A. 02:40 If you will now, please turn to slide 3, I will turn the call over to our CEO, Jeff Benck.

02:47 Thank you, Lisa and thank you everyone for joining our call this afternoon. I'm really proud of how our team performed in the third quarter amidst these unprecedented supply chain pressures. Despite these challenges, we delivered strong results with both revenue and profit growth. As we announced earlier today, revenue of $572 million was in line with our guidance and was up nine percent year-over-year. 03:11 Third quarter revenue growth was driven by continued strength in Semi-Cap, improving demand recovering in industrials, and ongoing program ramps in high performance computing. Now turning to profits, with improving revenue our Non-GAAP gross margins improved to 9.4% and non-GAAP operating margins improved to 3.3%, which represents a 38% sequential improvement in operating margins. As a reminder, our non-GAAP operating margins include stock compensation expenses, which were approximately 70 basis points in the third quarter. 03:51 Earnings per share of $0.39 was above the midpoint of our guidance and cash conversion cycle results were 71 days, albeit higher than last quarter, driven by an increase in inventory due to the supply environment. As mentioned previously, these results were achieved with a backdrop of ongoing supply chain challenges that made it significantly more difficult to meet all customer demand and delivery expectations. 04:19 In the third quarter, we estimated that we were unable to fulfill over $100 million of demand requested in the quarter from our customers. This demand is being aligned to component availability in Q4 and into the first half of 2022. While we expect a fair amount of the unfulfilled demand this quarter to roll into 2022, we also appreciate that some demand will likely perish as OEMs balance their demand plans against component availability in the new year. 04:53 Late supplier decommits and component delivery timing challenges are also creating inefficiencies for our operations team with continued replanning to manage volatile delivery schedules and allocations. On the COVID front, we are pleased that vaccine availability is improving around the world, especially for our international locations. 05:17 Having said that, we did continue to experience intermittent disruptions to our global operations based on the need to comply with government requirements and our own health and safety policies to protect our employees. Despite all the challenges I'm proud of how our teams have worked tirelessly and persevered to improve our position in support of our customers. 05:41 Please turn to slide four. In addition to strong sequential and year-over-year revenue growth, we had another great quarter of bookings. We are excited to see more and more of our customers have the opportunity to experience both our world-class design engineering capabilities and our complex high-quality manufacturing skills at our operations around the world. Our go-to-market team continues to perform well and we had some meaningful new program wins in Q3. 06:13 In medical, we were awarded new manufacturing programs for a glucose monitoring device and robotic surgery systems. On the engineering front, we were awarded the design of a new mobile medical cart, which we hope will be a near-term manufacturing opportunity. Leading with engineering design capabilities is a key tenet of our medical strategy and it's working well. 06:38 In Semi-Cap, we continue with new programs that build on our current robust portfolio. In Q3, we were awarded programs related to a wafer handling system and a wafer inspection tool. This was the second straight quarter where we had wins in Semi-Cap that leverage multiple business lines, including precision machining, engineering services and electronics manufacturing. 07:04 In the A&D sector, we were awarded new manufacturing programs for satellite antennas and advanced imaging sensors as well as product design and manufacturing for combat system electronics. In Industrials, we were awarded manufacturing for advanced microelectronics related to test and instrumentation products as well as manufacturing for lidar systems. 07:30 In Q3, a customer in the AI space announced that Benchmark had been selected as a manufacturing partner for optical modules for the customer's next-generation adaptive light sensor. We expect to be a partner for this customer and we are continuing to build on our strong core competencies for manufacturing very complex light-based products. 07:53 And finally, in the competing telco sectors, we were awarded new manufacturing programs in commercial printers and free-space optics along with a new test design program for an optical application. Overall, our funnel and new business outlook remains strong with all the great work from our go-to-market, engineering services and operations teams. 08:18 Now, I will turn the call over to Roop to give you more details on our third quarter financial results, as well as our guidance for Q4. Roop, over to you.

08:27 Thank you, Jeff, and good afternoon. Please turn to slide six for our revenue by market sector. Total Benchmark revenue was $572 million in Q3, which is five percent higher sequentially and nine percent higher year-over-year. Medical revenues for the third quarter were up eight percent sequentially and slightly higher than expected from improving demand in the cardio and respiratory care markets. As planned, our second half medical sector revenues are improving over first half 2021 levels from new programs and improving demand. Semi-Cap revenues were up 35% year-over-year and down slightly in the third quarter due to capacity issues at several external vendors. 09:10 This demand will be shipped in Q4 when products complete processing into our facilities. Demand levels remain high, and our future backlog is increasing for our precision machining and large electro-mechanical assembly services, which are primarily related to front-end wafer fab equipment. 09:28 A&D revenues for the third quarter increased four percent sequentially from stronger demand in Defense for secure communications related to several broad-based customer programs. While our Defense programs remain strong, A&D sector revenues were down four percent year-over-year because our commercial aerospace programs have yet to recover to pre-pandemic levels. Industrial revenues for the third quarter were up eight percent sequentially and 26% year-over-year from continued demand improvements from oil and gas, building infrastructure and commercial transportation programs, as well as a new program ramp in our applications. We expect industrials to be up ten percent over first half 2021 revenue levels. 10:13 Overall, the higher value markets represented 81% of our third quarter revenue. In our traditional markets, computing was up 43% sequentially from the planned ramp of high-performance computing programs that will continue into next year. In the telco sector, revenues were down sequentially and year-over-year primarily from delays in new program ramps due to component shortages. Our traditional markets represented 19% of third quarter revenues; our top ten customers represented 50% of sales in the third quarter. 10:48 Please turn to slide seven. Our GAAP earnings per share for the quarter was $0.23. Our GAAP results included restructuring and other one-time costs totaling $6.4 million related to various restructuring activities throughout our global network aligned to future business focus. 11:07 For Q3, our Non-GAAP gross margin was 9.4%; this is 20 basis points better than the midpoint of our third quarter guidance driven by a better mix and continued productivity improvements across our global facilities. On a sequential basis, we were up 60 basis points because of our higher revenue, improved productivity and utilization somewhat offset by supply chain inefficiencies. Our SG&A was $34.4 million which was sequentially flat from the prior quarter. 11:37 Non-GAAP operating margin was 3.3% in Q3 2021. Our Non-GAAP effective tax rate was 21.7% because of the mix of profits between the U.S. and foreign jurisdictions. Non-GAAP EPS was $0.39 for the quarter, which is $0.02 higher than the midpoint of our Q3 guidance and $0.10 sequential improvement. Non-GAAP ROIC was 7.8% sequentially flat and a 200-basis-point improvement year-over-year. 12:07 Please turn to slide eight to review our cash conversion cycle performance. Our cash conversion cycle days were 71 in the third quarter. The increase in cycle days as compared to Q2 was primarily due to investing in higher levels of inventory to support growth while navigating the constrained supply chain market. 12:25 Please turn to slide nine for an update on liquidity and capital resources. Our cash balance was $291 million at September 30, with $106 million available in the U.S. Our cash balances decreased $79 million sequentially. The decrease in cash is primarily the result of higher inventory levels as previously discussed. We used $42 million in cash flow in operations in Q3 and our free cash flow was a use of $55 million after capital expenditures. As of September 30, we had $131 million outstanding on our term loan and our cash net of debt is a positive $160 million. We currently have no borrowings outstanding on our available revolver. 13:08 Turning to slide ten to review our capital allocation activity. In Q3, we paid cash dividends of $5.9 million and used $9.9 million to repurchase 372,000 shares. As of September 30, we had approximately $164 million remaining in our existing share repurchase authorization. 13:29 Please turn to Slide eleven for a review of our fourth quarter 2021 guidance. We expect revenue to range from $560 million to $610 million which at the midpoint represents a 12% year-over-year improvement. We expect that our gross margins will be 9.2% to 9.4% for Q4 and SG&A will range between $33 million and $35 million. We are still targeting gross margins for the full year to be at 9%. Implied in our guidance is a 3% to 3.4% Non-GAAP operating margin range for modeling purposes. 14:06 The guidance provided does exclude the impact of amortization of intangible assets and estimated restructuring and other costs. We expect to incur restructuring and other non-recurring costs in Q4 of approximately $4.0 million to $4.5 million. Part of the forecasted restructuring in Q4 is related to the decision to discontinue manufacturing in our Moorpark, California EMS location and transition programs into other Benchmark locations. Jeff will give you more color on the strategic rationale for this decision. But I wanted to advise that the Q4 restructuring charges associated with this disclosure are expected to be between $2.5 million and $3.0 million and are included in the previous guidance we provided for Q4. Once the site closure is completed, we expect future annualized savings of approximately $4.0 million per year. 14:55 Our Non-GAAP diluted earnings per share is expected to be in the range of $0.37 to $0.45, or a midpoint of $0.41. We expect our CapEx spending for the year to be between $45 million and $55 million. We estimate that we will generate approximately $40 to $60 million of cash flow from operations for fiscal year 2021. This range contemplates higher inventory to support growth for our customers through Q4 2021 and into fiscal year 2022. We are committed to positive operating and free cash flow generation as part of our business model. 15:31 Other expenses math is expected to be $2.4 million, which is primarily interest expense related to our outstanding debt. We expect that for Q4 our Non-GAAP effective tax rate will be between 19% and 21% because of the distribution of income around our global network. The expected weighted average shares for Q4 are approximately 35.7 million shares. Before I turn the call back over to Jeff, I wanted to comment on our perspective on components supply. 15:59 As you're aware, end market demand continues to be strong as Jeff stated earlier. However, continued supply chain constraints across all commodity categories are constraining our ability to produce the full demand forecast we are receiving from our customers. The most significant changes in Q3 were an increase in push-outs of previously committed component orders and tighter allocation across the component suppliers. To counteract excess volatility, we have temporarily increased our inventory investment in raw materials to secure components aligned to our future customer demand. 16:35 We are actively working with customers to re-play and re-plan and redesign some products to enable alternate component sourcing. In general, our ability to fill upside demand is challenging due to component constraints, but we do believe these actions will give us confidence that we will grow revenue in 2021 in the high single digits. 16:55 In summary, our guidance takes into consideration all known constraints this quarter and assumes no further significant interruptions for supply base operations or customers. Guidance also assumes no material changes to end market conditions and our operations due to COVID. 17:10 And with that, I'll turn it back over to you, Jeff.

17:13 Thanks for that update, Roop. Following Roop’s comments on our third quarter guidance, I want to provide some additional color on our view of demand by vertical industry. That's shown on slide thirteen. For the fourth quarter, we expect sequential and year-over-year revenue growth from the Semi-Cap and computing sectors, with ongoing demand strength and signals from our customers in the front-end wafer fab processing capital equipment space. We are now revising our Semi-Cap forecast from 30% to 40% growth over 2020 sector revenues. If you recall as we entered the year, we were expecting a 10% annual growth rate and we have revised this outlook upward every quarter driven by continued strong demand for semiconductor capital equipment. 18:01 It has taken hard work by our team and a focused investment strategy to support this amazing in-year increase in demand. We expect growth to continue in Semi-Cap next year fueled by the super cycle, and we are investing in additional global capacity to further expand production output next year. In computing, we expect continued growth in Q4 in high performance computing as we had projected earlier this year due to a number of new programs at our OEMs. We have continued to win new projects in this complex targeted subsector, which supports our expectation for continued strength in high-performance computing revenues throughout 2022. 18:43 In industrials, we are pleased to see demand increasing in the second half of 2021 from our oil and gas and building infrastructure customers. With improving demand and a number of new program ramps, we now expect approximately 10% growth in this sector for the full year of 2021. 19:02 In the telco market, we expect a strong second half across the portfolio with strength from broadband infrastructure products. However, component shortages are prohibiting near-term revenue upside in this sector. In A&D, demand for the Defense programs remains strong, albeit with some quarterly fluctuations based on product certifications and supply chain. 19:28 While we expect Defense demand strength to continue in Q4 and into next year, our commercial aerospace portfolio is yet to see signs of any recovery. For the commercial aerospace subsector, we are primarily positioned on the multi-aisle aircraft, which are used for long-haul international flights, which are lagging in demand recovery. As such, we expect the A&D sector to remain flat for 2021 as Defense strength does not offset all aerospace weakness. 19:58 In the medical sector, revenues grew sequentially in Q3, but we are expecting flat revenues in Q4. While we have seen strong demand improvement in our base business, component availability is impacting our ability to fulfill all open customer orders and achieve the revenue growth we had previously expected for this year. On a positive note, improving demand as well as completion of new program qualifications are setting up medical to be a strong growth sector in 2022. 20:30 If you will turn to slide fourteen as we head into the final quarter of 2021, I wanted to provide a few highlights on our strategic objectives that were set for the year. Growing revenue remains a top priority at Benchmark and I'm pleased that our expected revenue growth in 2021 is pacing ahead of our mid-term model. 20:52 Revenue growth begins with strong bookings aligned with our targeted sector focus, our rich technical capabilities and our ability to tackle complex manufacturing problems. New programs along with continued demand expansion in Semi-Cap, medical, industrial and computing give us great momentum headed into the next year. 21:16 We are continuing to invest in a sustainable infrastructure and our talent for the future. We have momentum in our ESG and sustainability initiatives and we are well into our project plan to deliver our corporate sustainability report next year aligned to our proxy. Building on the SASB fact sheet we published last spring, our sustainability report will align with the Global Reporting Initiative and other frameworks such as the Task Force on Climate-related Financial Disclosures and the United Nations Sustainable Development Goals, all with the objective of increasing our transparency for investors and customers. 21:52 We are also advancing our diversity, equity and inclusion efforts aligned to our multi-year continuous improvement roadmap. Recently, we launched our global inclusion council that will be comprised of team members from different levels, departments and regions within the organization. The charter of this team is to discuss the company's role in DE&I and to provide advice to integrate, inform and shape the DE&I strategy at Benchmark. 22:30 I'm really excited about the tremendous amount of employee support we have received for this council. And I believe our employee voices are critical to the success of this program. Lastly, we're focused on growing earnings. In Q3, we grew earnings over 40% sequentially. These results were enabled by our continued revenue growth trajectory and our commitment to control our expenses. For the full year 2021, we expect non-GAAP gross margin of 9% and earnings growth greater than 30% over 2020. 23:07 As part of the strategic planning process for 2022 and beyond, we analyzed our network of operations, including current and future utilization of our global sites. As part of this process, we considered many factors including scale, geographic placement, current and future costs, and customers' long-range needs for increased volume manufacturing. 23:32 As Roop mentioned earlier, the outcome of this is that we have decided to close our Moorpark, California EMS operations, with a target closure date by the end of 2022. As a result of this action, we will be reducing our workforce in California by approximately 200 employees and reducing our global footprint by 3%. We will transfer customer programs from the site to other manufacturing locations in our network, which will in turn improve our overall asset utilization and efficiency. 24:07 These decisions that impact our teams are never easy. I want to thank our loyal employees at the Moorpark location for their past and future support to Benchmark. And to our customers for their ongoing support during the transition process. 24:23 In summary, on slide fifteen based on the continued strong demand in Semi-Cap and high-performance computing, with improving demand in industrials, we expect revenue growth in the high single digits for the year. With this revenue growth and mix, we are anticipating 9% gross margins in 2021 and year-over-year earnings growth of over 30%. As Roop discussed earlier, we are revising our operating cash flow downward based on our inventory investments, but we still expect positive operating cash flow for the year. 24:59 In closing, I'm very excited about our progress thus far in 2021 and our expected outlook for the full year. I want to express again my deep appreciation to our teams and hardworking suppliers who are working tirelessly to support our customers. I look forward to giving you an update on our results for 2021 and our views on 2022 in our earnings call in February. 25:23 And with that, I'll turn the call over to the operator to conduct Q&A.

25:30 Ladies and gentlemen, at this time, we will begin the question-and-answer session. Operator provided instructions. Our first question today comes from Jaeson Schmidt from Lake Street. Please go ahead with your question.

26:06 Hey, guys. Thanks for taking my questions. I just want to start with the supply constraints, obviously, they're really well known out there and seem to be pretty broad-based, but you specifically called out medical, just curious if you could sort of rank order where you're seeing the most headwinds? I mean, it does sound like the Semi-Cap constraints will be easing in Q4, but what are you seeing sort of in the other kind of higher value markets?

26:33 Hey, Jaeson, good to talk to you. So, I'll start, and I have Jeff add. Really, the constraints we're seeing are across all the sectors to some degree because the constraints are cutting across all commodity areas of this supply chain. And so, that's also part of the reason we've invested in the inventory that we have to help support demand we're seeing from an end-market standpoint. As we move forward, I think that investment will allow us to address the demand we're seeing as we move forward. 27:09 Let me just add a little bit on Semi-Cap. Obviously, fewer components are required in some Semi-Cap work because we do precision machining of metal for a lot of the work we do there. We had a lot of outside process supplier issues in the third quarter that we believe we're working our way through; some of those have to do with coatings and cleaning and other things. More COVID-related, not really necessarily part of the broader component criticality, which you could argue COVID is a factor there too, Jaeson, but it is a little bit different when you think of that supply chain for that type of business. So that's probably what we were referring to because Semi-Cap didn't see the sequential growth even though it's way up year-over-year. 27:58 And Jaeson, maybe the only other things specific to medical, if you think about it, the constraints are keeping us from seeing upside in medical and that's probably why we pointed that out for you.

29:04 There's currently two dynamics going on here. One dynamic is lead times are extending; if you have upside within lead time, it's harder to get that product for customers because it's just taken longer to get the components you need. But we have seen within-quarter demand that was lined up and had been on order for a long time, where suppliers say, 'I'm not going to be able to deliver it when I thought it was.' We've seen issues at the Port of Long Beach and other ports with containerships hanging out there trying to unload. So, there's a lot of risk in the supply chain as you can see from the results and we've been able to manage through that pretty well, but certainly it's a crazy environment.

29:50 Okay. No, that's really helpful. And then just to clarify your comments on seeing some decommits, is that just your expectation given how long these constraints have lasted and are expected to last? Or are you actually seeing some decommits today?

28:31 Yes, it's a great question. It's really decommits or replanning of the component and pushing them out that's affecting us. And again, this especially affects us where we've got the demand bills expected and when they are delayed, it pushes our build schedule out and defers that revenue opportunity. So, we then replan it and we work with our customers to try and get allocation of those components to see if we can still finish building it or get it more near-term versus long-term.

30:48 Okay, that makes sense. Thanks a lot, guys.

30:51 No worries. Thanks for the good questions.

30:54 Our next question comes from James Ricchiuti from Needham & Company. Please go ahead with your question.

31:00 Hi. Thank you. Good afternoon. I joined a little bit late, but I may have heard—and this is what I would like to just clarify—did I hear you say roughly on the order of $100 million of demand that you were unable to fulfill in the quarter because of the component challenges?

31:18 That's right, Jim. That's the number.

31:22 Okay. That's a big number. I just want to get a little better sense as to—if you can talk a little bit to the profitability of that business and perhaps which verticals it was more pronounced in?

31:45 Yeah, I would say it's not necessarily more pronounced in one particular vertical or another, Jim, and probably Semi-Cap was the least affected other than the process supplier issues I mentioned earlier. The $100 million or so that's pushing out really cuts across all of the sectors to some degree and cuts across our network of sites as well. So, it's fairly consistent from that standpoint.

32:09 And then in terms of actual business that you think may be perishable—are you able to quantify that?

32:19 Well, that's hard to pinpoint. We hear from customers that they still want the product. We had a pretty big push from last quarter that was not the same as this quarter. So, you could argue this is sort of rolling forward as we fulfill demand and continue to grow. Now that some of the demand is rolling through the year-end boundary, we know we can't fulfill everything in this quarter; some will roll over. We're being pragmatic and saying customers will reassess what they can expect in terms of what they can secure from Benchmark. That being said, they have strong demand and they'll probably continue to keep the pressure on. We do believe a large amount will roll into 2022. We just don't have enough visibility right now to definitively say that the $100 million will show up in Q1. I think we'll see some adjustments when customers set their new fiscal year operating plans.

33:39 Got it. And apart from the component challenges, which are certainly significant, I'm wondering to what extent you're being impacted by rising costs elsewhere—what extent are you seeing pressure on labor costs as well? I mean certainly it's impacting folks with U.S. operations.

34:08 Yes. I mean, we are definitely seeing cost pressure on the material side and much of that we look to pass on to customers. From a labor standpoint, there's definitely wage pressures in the various jurisdictions we are in the U.S. and to a certain extent even internationally, but it's something that our teams are doing a very good job of effectively managing and supporting our employees through.

34:39 Yeah, we have had to make some adjustments on starting salaries in certain domains to stay competitive. We also focus on benefits and ensuring the whole package makes sense for our employees. It's beyond just the monetary piece; the kind of environment and how we care for our employees is important. But there is more pressure on resources and as we grow, we're going to need to add resources—there's a war on talent and it's something we're paying quite a bit of attention to. That is putting some pressure on costs. As Roop described, we also have a lot of leverage in our model as we continue to grow revenues, which helps mitigate margin impact from increasing costs.

35:44 Okay. I may have missed this, but you've talked in the past about the ramp up to scale up in that high-performance computing program, which I think was second half—how much of that skewed more to Q4 and is that scaling where you anticipated?

36:04 Yes, it is. In fact, we were up over 40% sequentially in Q3. So, it definitely happened and it's continuing because we've actually filled in with some additional wins in that segment from other customers and also other programs with the large customer that we had there. So, we're going to see a strong quarter again, particularly year-over-year in compute in Q4. We also are looking at 2022 and expect it to hold off nicely because of some of the fill-in that we've had in the back half of the year on other programs. So, it kind of went from one larger program to quite a bit of activity and we've had good momentum and success.

36:52 Got it. Thank you.

36:54 And our next question comes from Anja Soderstrom from Sidoti. Please go ahead with your question.

37:12 Hi Jeff, Roop, and Lisa. Thanks for taking my questions. I have some follow-up on the supply constraints—how did you see that progress over the quarter and what do you see going into the fourth quarter? It sounds like it worsened during the quarter, but what are you seeing in the fourth quarter?

37:40 Yes, on the constraints just a little bit, we think the constraints in the third quarter were worse. We think they will continue into the fourth quarter. And really as we look into 2022, we think the constrained market is going to continue throughout 2022. So, it got worse in the third quarter. That's all the more reason we appreciate what our teams were able to accomplish—it was quite extraordinary. 38:13 The fourth quarter is going to be challenging, but we think we've got that factored into our guidance as we thought about the fourth quarter.

38:20 Yes, that is probably a global supply chain issue. We had previously said maybe mid-next year things might start to ease. We're now looking at probably dealing with constraints throughout 2022—hopefully less impactful as we get to the back half of the year, but comments from large customers suggest constraints could persist through much of 2022. So unfortunately, we're a part of that and we have built the effects of that into our outlook. We hope Q3 and Q4 of next year may be less constrained, but we know it's continuing.

39:00 So how much now is part of that—how much is in terms of component constraints versus the supply chain issues with ships being delayed?

39:13 It's more the components first because component suppliers don't have more capacity; they're having to allocate and may prioritize certain industries, which means other industries don't get allocations. I think that is the predominant issue. But there is no question shipments being late—port and trucking issues—are exacerbating the problem. At the foundation, it really starts with not enough capacity of components. That really goes across the range now; it's not limited to memory or passives or just semiconductors. We're seeing pressures on plastics, sheet metal and even adhesives—there are some restrictions on those as well.

40:15 So I want to ask about the labor inflation—how do you see the availability of labor and the vaccine rollout? Is it improving or ...

40:31 I wouldn't say it's just improving uniformly. In some cases, we have been able to get agency help to find specific skills or set up programs with our own team to recruit talent where we need it. There is some concern about vaccine mandates and the implications those could have. We're still working through that; it's a complex issue with a lot of noise in the system about that, but it's something we will learn more about in the coming weeks.

41:23 Okay. Thank you. I think that was all for me. Good questions.

41:31 Okay. Thanks.

41:35 And ladies and gentlemen, with that, we'll end today's question-and-answer session. I'd like to turn the floor back over to Lisa Weeks for any closing remarks.

41:44 Thank you again for joining our call today. If you have any follow-up questions regarding our earnings release today, please don't hesitate to reach out and I'll be happy to follow up. I also wanted to put a reminder that Benchmark will be supporting the NYSE virtual Industrials Access Day on November 16th and the Needham Group Conference on January 11, 2022. We look forward to engaging with you at these events as well as our earnings call in February. Thank you all and hope you have a great afternoon.

42:15 Again, ladies and gentlemen, with that we will conclude today's conference call. We do thank you for attending. You may now disconnect your lines.