Benchmark Electronics, Inc. · NYSE:BHE
Benchmark Electronics — Q1 2017 Earnings Presentation
19 slides from Benchmark Electronics's earnings presentation, Apr 19, 2017
Slide 1: Q1 2017 Earnings Presentation
Q1 2017 Earnings Presentation April 19, 2017 design develop deliver advanced technology
Slide 2: Forward-Looking Statements
Forward-Looking Statements This document contains forward-looking statements within the scope of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “expect,” “estimate,” “anticipate,” “predict” and similar expressions, and the negatives thereof, often identify forward-look
Slide 3: CEO Update
CEO Update design develop deliver advanced technology 3
Slide 4: First Quarter 2017 Summary
First Quarter 2017 Summary Revenue and non-GAAP operating margins exceeded the high end of guidance Revenues up 3%, the first year-over-year growth in 11 quarters Gross margins at 9.3%, a 10 bps year-over-year improvement Non-GAAP operating margins at 3.8% and EPS at $0.34 Exceeded working cap
Slide 5: New Business Wins
New Business Wins 2017 New Business Estimated Annual Revenue from New Wins by Segment Business Wins $160 $128 $134 $150 $120 $120 $125 $125 $118 $123 $140 $130 $120 $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $- Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 $ (USD M) Q1 New Business Wins Highlig
Slide 6: 2017 Transition Year: Update on Priorities
2017 Transition Year: Update on Priorities Optimization of our network for elevated execution Consolidate corporate staff in one location (Arizona) for speed and efficiency Accelerate operational excellence programs Continue focus on asset velocity Implementation of market-sector sales organiz
Slide 7: Current Progress Milestones
Current Progress Milestones design develop deliver advanced technology 7
Slide 8: Q1 2017 Financial Highlights
Q1 2017 Financial Highlights design develop deliver advanced technology 8
Slide 9: First Quarter 2017 Financial Summary
First Quarter 2017 Financial Summary For the Three Months Ended Mar 31, Dec 31, Mar 31, (In millions, except EPS) Q/Q Y/Y 2017 2016 2016 Net Sales $567 $608 (7%) $549 3% Non-GAAP Operating Margin 3.8% 4.8% (100 bps) 4.0% (20 bps) Non-GAAP Diluted EPS $0.34 $0.45 (24%) $0.30 13% GAAP Operating Margin
Slide 10: Revenue by Market Sector
Revenue by Market Sector For the Three Months Ended Higher-Value (1) (1) (1) Mar 31, 2017 Dec 31, 2016 Q/Q Mar 31, 2016 Y/Y Markets Industrials 21% $118 20% $120 (2%) 25% $138 (14%) Aerospace & Defense 18% $104 17% $102 2% 16% $91 14% Medical 15% $86 14% $86 -- 15% $83 4% Test & Instrument. 14% $77
Slide 11: Key Business Trends
Key Business Trends 1,400 Revenue & Gross Margin ($M) 15.0% 70.0 SG&A ($M) 8.0% 7.0% 13.0% 60.0 5.5% 1,200 9.5% 5.2% 4.9% 4.9% 6.0% 9.3% 11.0% 50.0 1,000 9.2% 9.1% 9.2% 4.7% 5.0% 9.0% 40.0 800 4.0% 7.0% 30.0 600 608 28.5 28.5 28.1 28.4 31.0 3.0% 400 549 579 574 567 5.0% 20.0 2.0% 3.0% 10.0 200 1.0%
Slide 12: SG&A Investments
SG&A Investments Continued Investments for Future Growth SG&A savings reinvested for long-term revenue growth Investments vary between fixed expenses and variable & non-cash expenses Benchmark includes stock compensation expense in SG&A design develop deliver advanced technology 12
Slide 13: Cash Flow / Working Capital Highlights
Cash Flow / Working Capital Highlights For the Three Months Ended Mar 31, Dec 31, Mar 31, (In millions) 2017 2016 2016 Cash Flow from Operations $78 $44 $77 1 FCF $70 $38 $69 Cash $752 $681 $519 International $659 $626 $477 US $93 $55 $42 Inventory $404 $381 $390 Accounts Receivable $381 $441 $414 A
Slide 14: Working Capital Update
Working Capital Update 120 100 99 83 80 80 74 67 60 40 20 0 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Accounts Receivable Days Accounts Payable Days Inventory Days Deposits Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Accounts Receivable Days 68 66 65 65 61 Accounts Payable Days 39 47 53 53 60 Inventory Days 70 64 68 62 70 De
Slide 15: Second Quarter 2017 Guidance
Second Quarter 2017 Guidance Guidance Net Sales (in millions) $565 – $ 585 Operating Margin – non-GAAP* 3.6% – 3.9% Diluted EPS – non-GAAP* $0.31 – $0.35 * The above guidance excludes the impact of amortization of intangible assets and estimated restructuring charges design develop deliver advanced
Slide 16: Modeling Information
Modeling Information Q2-17 Q2-17 Higher-Value Markets Outlook (%) Traditional Markets Outlook (%) Industrials Down Low-Singles Computing Up ~20% Aerospace & Defense Up Low-Singles Telecommunications Down >10% Medical Up Low-Singles Test & Instrumentation Up Low-Singles Q2-17 Guidance (1) Interest Ex
Slide 17: Appendix
Appendix design develop deliver advanced technology 17
Slide 18: Reconciliation of GAAP to non-GAAP Financial Results
APPENDIX 1 - Reconciliation of GAAP to non-GAAP Financial Results (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) Three Months Ended March 31, December 31, March 31, 2017 2016 2016 Income from operations (GAAP) $ 12,417 $ 23,548 $ 16,268 Restructuring charges and other costs 1,511 2,663
Slide 19: Reconciliation of GAAP to non-GAAP Financial Measures
APPENDIX 2 - Reconciliation of GAAP to non-GAAP Financial Measures (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) Three Months Ended Mar 31, 2017 Mar 31, 2016 GAAP gross profit $ 49,060 $ 50,317 Customer Insolvency 3,423 - Non-GAAP gross profit $ 52,483 $ 50,317 GAAP SG&A Expenses $ 32,
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