June 23, 2021
Dear Partner,
As we near the halfway point of 2021, I want to take a moment to address the unprecedented backlog and long lead times for Hypertherm plasma systems. I know this situation has been painful for many of you and want to assure you that everyone at Hypertherm is doing everything possible, regardless of cost, to minimize the impact to your business.
Our long lead times are the result of two factors: strong demand for our systems and isolated component shortages. Global demand for Hypertherm products is stronger than we have seen in years. At the same time, component shortages are impacting the entire supply chain across industries from food to electronics to cars.
We continue to increase our manufacturing capacity by aggressively hiring and training new Associates. We have implemented recruitment bonuses and wage adjustments to attract new Associates in a tight labor market. We have significantly expanded the number of people building our systems, nearly doubling the number of assemblers of the Powermax line alone.
Our teams are working tirelessly to secure the parts we need to build our systems. This includes in-sourcing as many components as possible, bringing new suppliers on-line, and sending Associates to work at a short-staffed supplier. We will never specify lower-quality components just to reduce our backlog.
The addition of more Associates coupled with tactics on the supply side means that by July, we will be building two and half times more XPR, HPR, and MAXPRO200 systems and twice as many Powermax systems than we were at the beginning of the year. As a result, our production rates are finally exceeding the unprecedented incoming order rates. Simply put, we have reached a peak and expect a reduction in lead times throughout the second half of the year. Lead times for our Heavy Industrial systems should return to normal levels by November and Powermax lead times should be at more acceptable levels by the end of the year.
In closing, I’d like to thank you for your continued patience and loyalty to Hypertherm during these trying times. We know this is impacting your business and that competitive plasma manufacturers are lobbying hard for your business. As an Associate-owned company, we are fortunate to have the ability to manage our company with your long-term interests in mind. We have an experienced leadership team, a very strong financial position, and a commitment to prioritize any and all expenditures and efforts required to get back to the superior delivery performance you are accustomed to from Hypertherm.
Our Associates will continue to do their best to support you. Please continue to reach out to your Hypertherm sales representative with any questions or concerns.
Sincerely,
Evan Smith
President and CEO