Slide 1: Q2-20 Earnings Call, July 29, 2020
| 1 Q2 - 20 Earnings Call July 29, 2020
Slide 2: Forward-looking statements
| 2 | 2 This press release contains forward - looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "estimate," "anticipate," "could" "predict" and similar expressions, and the negatives thereof,
Slide 3: Second Quarter 2020 Overview
| 3 Second Quarter 2020 Overview Achieved revenue of $491 million ‒ Against a backdrop of mandatory facility shutdowns and component constraints Realized Non - GAAP gross margin of 7.0% and Non - GAAP earnings per share of $0.07 ‒ GAAP and non - GAAP earnings results include $0.10 impact from CO
Slide 4: Leadership During Time of Crisis
| 4 Leadership During Time of Crisis Team has risen to the occasion in the COVID - 19 environment Diversified portfolio is a strength Benchmark supply chain team has performed well Revamped go - to - market organization has grown pipeline 2x and increasing bookings On track to exit 2020 at
Slide 5: Benchmark Continued Response to COVID-19 Global Pandemic
| 5 Benchmark Continued Response to COVID - 19 Global Pandemic Priority is sustaining a safe work environment for our employees ‒ Utilizing a closed loop feedback employee survey program to ensure our employees feel safe ‒ Maintaining protective gear for employees and evolving testing solutions ‒
Slide 6: Status of Benchmark Operations During the Pandemic
| 6 Status of Benchmark Operations During the Pandemic Priority remains creating a safe work environment for our employees Asia Europe U.S. Mexico • Various impacts throughout U.S. operations in Q2 • California operations most significantly impacted; returned to full operations in early May • All U.
Slide 7: Roop Lakkaraju, Chief Financial Officer
| 7 Roop Lakkaraju Chief Financial Officer
Slide 8: Revenue by Mix and Market Sector
| 8 Revenue by Mix and Market Sector For the Three Months Ended Higher - Value Markets Mix % Revenue Mix % Revenue Q/Q Mix % Revenue Y/Y Medical 27% $135 23% $118 14% 19% $114 18% Semi - Cap 18% $87 16% $83 5% 10% $63 39% Aerospace & Defense 18% $88 23% $119 (26%) 18% $107 (17%) Industrials 18% $87
Slide 9: Second Quarter 2020 Financial Summary (GAAP)
| 9 Second Quarter 2020 Financial Summary (GAAP) See APPENDIX 1 for a reconciliation of GAAP to non - GAAP Financial Results For the Three Months Ended (In millions, except EPS) June 30 , 2020 Mar. 31 , 2020 Q/Q June 30 , 2019 Y/Y Net Sales $491 $515 (5%) $602 (18%) GAAP Gross Margin 7.1% 8.4% (130
Slide 10: Second Quarter 2020 Financial Summary (Non-GAAP)
| 10 Second Quarter 2020 Financial Summary (Non - GAAP) For the Three Months Ended (In millions, except EPS) June 30 , 2020 Mar. 31 , 2020 Q/Q June 30 , 2019 Y/Y Net Sales $491 $515 (5%) $602 (18%) Non - GAAP Gross Margin 7.0% 8.4% (140 bps) 8.3% (130 bps) Non - GAAP SG&A $28.5 $31.6 (10%) $31.5 (10
Slide 11: Cash Flow / Balance Sheet Summary
| 11 Cash (In millions) June 30 , 2020 Mar. 31 , 2020 June 30, 2019 Cash Flows from (used in) Operations $23 ($3) $52 FCF (1) $13 ($16) $47 Cash $356 $412 $397 International $162 $189 $180 US $194 $223 $217 Cash Flow / Balance Sheet Summary For the Three Months Ended (1) Free cash flow (FCF) defined
Slide 12: Working Capital Update
| 12 Working Capital Update Q1 - 19 Q2 - 19 Q3 - 19 Q4 - 19 Q1 - 20 Q2 - 20 Accounts Receivable Days 61 54 56 57 56 55 Contract Asset Days 23 23 26 29 28 28 Inventory Days 51 52 56 60 65 72 Deposits 3 3 7 7 7 10 Accounts Payable Days 60 60 52 58 61 61 Cash Conversion Cycle 72 66 79 81 81 84 The upda
Slide 13: Capital Allocation Update
| 13 Capital Allocation Update Dividends Quarterly dividend of $0.16 per share totaling $5.8 million paid in April 2020 Recurring quarterly dividends to continue until further notice Share Repurchases Share repurchase program expanded by $150 million; remaining authorization to repurchase shar
Slide 14: Third Quarter 2020 Guidance
| 14 Third Quarter 2020 Guidance * The above guidance excludes the impact of amortization of intangible assets and estimated restructuring charges and other costs. Our guidance includes known constraints due to COVID - 19 and assumes no further significant interruptions occur to our supply base, ope
Slide 15: Jeff Benck, President & Chief Executive Officer
| 15 Jeff Benck President & Chief Executive Officer
Slide 16: Revenue Trends by Market Sector
| 16 Revenue Trends by Market Sector Medical Semi - Cap Defense Aerospace Industrial Computing/ Telco • Demand remains strong for new ramps and COVID - 19 products • Softer demand for non - critical care systems through 2H - 20 • Strong demand in defense (represents ~70% of sector revenues) • S ecur
Slide 17: New Business Wins Continue
| 17 New Business Wins Continue Medical Wireless fall detection system (design & mfg.) Drug delivery i nfusion pump (design, process design, & mfg. ) Ventilators ( mfg.) Semi - Cap Semi - cap tool electronic controller (design) Cabinet cable assembly (design) Aerospace & Defense Space mo
Slide 18: Progress: Key Strategic Initiatives
| 18 Progress: Key Strategic Initiatives Staying focused on the longer term horizon Customer satisfaction at high levels 3 awards for exceptional support during COVID - 19 crisis Supporting Applied Material’s SuCCESS2030 Sustainability Initiative Focus on the Customer Improving operating per
Slide 19: Appendix
Appendix Benchmark. | 19 i "
Slide 20: Appendix 1 - Reconciliation of GAAP to non-GAAP Financial Results
| 20 (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) APPENDIX 1 - Reconciliation of GAAP to non - GAAP Financial Results (1) This amount represents the tax impact of the non - GAAP adjustments using the applicable effective tax rates. Three Months Ended Six Months Ended Jun 30, Mar 31, J
Slide 21: Appendix - Reconciliation of GAAP to Non-GAAP Financial Measures
| 21 (Amounts in Thousands) – (UNAUDITED) APPENDIX 2 - Reconciliation of GAAP to Non - GAAP Financial Measures Three Months Ended June 30 , 2020 Mar. 31 , 2020 June 30, 2019 GAAP Gross Profit $34,672 $43,361 $49,223 Settlement - - 773 Customer insolvency (recovery) (353) - (16) Non - GAAP Gross Prof
Slide 22: Appendix - Reconciliation of Free Cash Flow
| 22 (Amounts in Thousands) – (UNAUDITED) APPENDIX 3 - Reconciliation of Free Cash Flow Three Months Ended June 30 , 2020 Mar. 31 , 2020 June 30 , 2019 Net Cash Provided by (Used in) Operations $23,027 ($3,109) $52,358 Additions to property, plant and equipment and software (10,394) (12,896) (5,421)