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Economic Outlook: Lightspeed Manufacturing Sees Company Growth in Industry Consolidation
December 15, 2023 | I-Connect007 Editorial TeamEstimated reading time: 1 minute
Lightspeed Manufacturing is a Massachusetts-based contract manufacturer specializing in production, prototyping and repair services. Rich Breault, Lightspeed chief executive officer, shared his outlook from the northeast United States.
How would you describe your economic outlook for the industry and your company's business outlook going into 2024? What are you optimistic about? What are you worried about?
I see the outlook for the EMS business as very positive for the upcoming several years. I can especially speak about the EMS in the US Northeast Region. There has been much consolidation and M&A activity in the last couple of years. There are a fraction of providers currently compared to just five years ago. Most of the larger Tier 1 suppliers have left the territory, and many of the small providers have not continued to make the investment in new capital equipment and advanced process. As such, at Lightspeed we expect to see a minimum of a 50% sales growth in 2024.
Buying capital equipment with cash vs. financing - your perspective?
We recently invested in a top MRP system and materials team. We believe this is a significant and critical investment needed for the future of Lightspeed. It has already started to give us much more insight into how we purchase and inventory material. We have dramatically increased material turns, and reduced inventory values, helping to improve cash flow. We do not have any long-term debt on our balance sheet, which is critical to maintaining a strong financial future.
Is inventory management and/or supply chain tying up capital you would otherwise use for capital investment?
We have always liked to purchase capital equipment with cash compared to financing. With interest rates rising, we are trying to continue down this path. We add a new piece of capital on a very regular basis, and we work closely with key suppliers to ensure value. In coordination with our sales growth projections, we are budgeting for our largest capital investment in 2024.
To read this entire conversation, which appeared in the December 2023 issue of SMT007 Magazine, click here.
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