Slide 1: Benchmark Electronics, Inc. Q2 2018 Earnings
© 2018 Benchmark Electronics, Inc. Benchmark Electronics, Inc. Q2 2018 Earnings July 24, 2018
Slide 2: Forward-Looking Statements
| 2 © 2018 Benchmark Electronics, Inc. Forward - Looking Statements This document contains forward - looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934. The words “expect,” “estimate,” “anticipate,” “predict” and
Slide 3: Implementation of ASC 606 – Revenue from Contracts with Customers
| 3 © 2018 Benchmark Electronics, Inc. Implementation of ASC 606 – Revenue from Contracts with Customers Effective January 1, 2018, the Company implemented ASC 606 the accounting standard governing “Revenue from Contracts with Customers” using the full retrospective transition method. Under ASC 606,
Slide 4: CEO Update
| 4 © 2018 Benchmark Electronics, Inc. CEO Update
Slide 5: Second Quarter 2018 Summary
© 2018 Benchmark Electronics, Inc. | 5 Second Quarter 2018 Summary O perational p erformance ► Revenue exceeded the high end of Q2 guidance ► Year - over - year revenue growth of 7% ► Non - GAAP gross margins declined for the quarter to 8.2% ► Delivered $0.30 non - GAAP EPS for the quarter Working c
Slide 6: New Business Wins with Focus on Market Sector Sales
© 2018 Benchmark Electronics, Inc. | 6 New Business Wins with Focus on Market Sector Sales Q2 2018 New Business Wins by Segment Estimated Annual Revenue from New Business Wins Comp, Telco 18% Industrials 40% A&D 4% Medical 28% T&I 10% Traditional Markets Higher - Value Markets ► 25 manufacturing and
Slide 7: 2018 Investment Updates
© 2018 Benchmark Electronics, Inc. | 7 2018 Investment Updates Extend value proposition for customers ► High - speed circuits capacity in Tempe by Q4 ► M icroelectronics capacity expansion (US and Asia) complete in Q3 ► RF component expansion Expand engineering and technology investments ► Defense s
Slide 8: Q3 Guidance
© 2018 Benchmark Electronics, Inc. | 8 Q3 Guidance * The above guidance excludes the impact of amortization of intangible assets, estimated restructuring charges and other costs, in addition to the write - off of existing deferred financing charges due to the debt refinancing Guidance Net Sales (in
Slide 9: Progress Milestones 2H-18
© 2018 Benchmark Electronics, Inc. | 9 $152 $156 $171 $177 $200 Q3-17 Q4-17 Q1-18 Q2-18 2H-18 Waypoint 68% 63% 69% 64% >67 % 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q3-17 Q4-17 Q1-18 Q2-18 2H-18 Waypoint $28 $26 $24 $23 $29* $- $5 $10 $15 $20 $25 $30 $35 $40 $45 Q3-17 Q4-17 Q1-18 Q2-18 2H-18 Way
Slide 10: Q2 2018 Financial Highlights
| 10 © 2018 Benchmark Electronics, Inc. Q2 2018 Financial Highlights
Slide 11: Second Quarter 2018 Financial Summary
© 2018 Benchmark Electronics, Inc. | 11 Second Quarter 2018 Financial Summary For the Three Months Ended (In millions, except EPS) Jun. 30 , 2018 Mar. 31 , 2018 Q/Q Jun. 30 , 2017 Y/Y Net Sales $661 $608 9% $620 7% GAAP Operating Margin 2.2% 3.0% (80 bps) 3.7% (150 bps) GAAP Diluted EPS $0.23 ($0.49
Slide 12: Revenue by Market Sector
© 2018 Benchmark Electronics, Inc. | 12 Higher - Value Markets Jun. 30 , 2018 Mar. 31 , 2018 Q/Q Industrials 18% $118 20% $125 (5%) Aerospace & Defense 15% $103 16% $98 5% Medical 15% $97 16% $97 -- Test & Instrument. 16% $106 17% $102 4% Total Revenue $424 $422 -- Revenue by Market Sector (1) In mi
Slide 13: GAAP Key Business Trends
© 2018 Benchmark Electronics, Inc. | 13 GAAP Key Business Trends Return on Invested Capital (LTM) Operating Margin ($M) SG&A ($M) Revenue & Gross Margin ($ M ) NOPAT Inv. Capital 23.1 20.9 21.9 18.0 14.3 3.7% 3.4% 3.3% 3.0% 2.2% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 0.0 10.0 20.0 30.0 40.0 50.0 60
Slide 14: Non-GAAP Key Business Trends
© 2018 Benchmark Electronics, Inc. | 14 Non - GAAP Key Business Trends Operating Margin ($M) SG&A ($M) Revenue & Gross Margin ($ M ) NOPAT Inv. Capital Non - GAAP ROIC = (Non - GAAP income from operations – Non - GAAP Tax Impact) · [Average Invested Capital for last 5 quarters] (1) Excludes the impa
Slide 15: Cash Flow / Working Capital Highlights
© 2018 Benchmark Electronics, Inc. | 15 (In millions) Jun. 30 , 2018 Mar. 31 , 2018 Jun. 30 , 2017 Cash Flows from (used in) Operations ($41) $25 $15 FCF ($58) $4 ($4) Cash $596 $676 $749 International $177 $438 $623 US $419 $238 $126 Inventory $319 $306 $282 Accounts Receivable $445 $404 $392 Contr
Slide 16: Working Capital Update
© 2018 Benchmark Electronics, Inc. | 16 Working Capital Update Ongoing Cash Conversion Cycle Days will Range between 73 and 68 Days Q2 - 16 Q3 - 16 Q4 - 16 Q1 - 17 Q2 - 17 Q3 - 17 Q4 - 17 Q1 - 18 Q2 - 18 Accounts Receivable Days 66 64 63 62 57 61 59 59 61 Contract Asset Days 21 22 23 24 22 24 20 22
Slide 17: Capital Allocation Update
© 2018 Benchmark Electronics, Inc. | 17 Capital Allocation Update Stock repurchase authorization in Q1 - 18 ► Board approved stock repurchase of up to an additional $250 million of common stock Recurring dividend initiated Q1 - 18 ► Announced first quarterly cash dividend of $0.15 per share to share
Slide 18: Credit Facilities Refinanced and Expanded
design develop deliver advanced technology 18 © 2018 Benchmark Electronics, Inc. | 18 Credit Facilities Refinanced and Expanded ► Refinanced and expanded our existing credit facilities in July 2018 ► New facilities totaling $650 million consist of ‒ $150 million Term Loan A ‒ $500 million revolver ►
Slide 19: Third Quarter 2018 Guidance
design develop deliver advanced technology 19 © 2018 Benchmark Electronics, Inc. | 19 Third Quarter 2018 Guidance * The above guidance excludes the impact of amortization of intangible assets, estimated restructuring charges and other costs, in addition to the write - off of existing deferred financ
Slide 20: Sequential Modeling Information
design develop deliver advanced technology 20 © 2018 Benchmark Electronics, Inc. | 20 Sequential Modeling Information Higher - Value Markets Q3 - 18 Outlook (%) Industrials Up High Singles Aerospace & Defense Up High Teens Medical Down Mid - Singles Test & Instrumentation Down >20% Traditional Marke
Slide 21: Appendix
| 21 © 2018 Benchmark Electronics, Inc. Appendix
Slide 22: APPENDIX 1 - Reconciliation of GAAP to non-GAAP Financial Results
design develop deliver advanced technology 22 © 2018 Benchmark Electronics, Inc. | 22 APPENDIX 1 - Reconciliation of GAAP to non - GAAP Financial Results (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) Jun 30, Mar 31, Jun 30, 2018 2018 2017 2018 2017 $ 14,349 $ 17,967 $ 23,124 $ 32,316 $
Slide 23: APPENDIX 2 - Reconciliation of GAAP to non-GAAP Financial Measures
design develop deliver advanced technology 23 © 2018 Benchmark Electronics, Inc. | 23 APPENDIX 2 - Reconciliation of GAAP to non - GAAP Financial Measures (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) Jun 30, 2018 Jun 30, 2017 GAAP gross profit 54,299$ 59,484$ Customer Insolvency (reco