Slide 1: Q1 2017 Earnings Presentation
design develop deliver advanced technology Q1 2017 Earnings Presentation April 19, 2017
Slide 2: Forward-Looking Statements
design develop deliver advanced technology 2 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 t
Slide 3: CEO Update
design develop deliver advanced technology 3 CEO Update
Slide 4: First Quarter 2017 Summary
design develop deliver advanced technology 4 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 opera
Slide 5: 2017 New Business Wins by Segment
design develop deliver advanced technology 5 2017 New Business Wins by Segment ▪ 27 manufacturing and 21 engineering project awards ▪ Estimated annual revenue run rate between $118 – $149 million ▪ Continued new business wins in targeted markets Estimated Annual Revenue from New Business Wins New Bu
Slide 6: 2017 Transition Year: Update on Priorities
design develop deliver advanced technology 6 2017 Transition Year: Update on Priorities Optimization of our n etwork for elevated e xecution ▪ Consolidate corporate staff in one location (Arizona) for speed and efficiency ▪ Accelerate operational excellence programs ▪ Continue focus on asset velocit
Slide 7: Current Progress Milestones
design develop deliver advanced technology 7 Current Progress Milestones
Slide 8: Q1 2017 Financial Highlights
design develop deliver advanced technology 8 Q1 2017 Financial Highlights
Slide 9: First Quarter 2017 Financial Summary
design develop deliver advanced technology 9 (In millions, except EPS) Mar 31 , 2017 Dec 31 , 2016 Q/Q Mar 31 , 2016 Y/Y 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 2.2% 3.9% (
Slide 10: Revenue by Market Sector
design develop deliver advanced technology 10 Higher - Value Markets Mar 31 , 2017 Dec 31 , 2016 Q/Q Industrials 21% $118 20% $120 (2%) Aerospace & Defense 18% $104 17% $102 2% Medical 15% $86 14% $86 -- Test & Instrument. 14% $77 11% $65 17% Total Revenue $385 $373 3% Traditional Markets Mar 31 , 2
Slide 11: Key Business Trends
design develop deliver advanced technology 11 21.9 24.3 24.7 29.1 21.5 4.0% 4.2% 4.3% 4.8% 3.8% 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 60.0 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 549 579 574 608 567 9.2% 9.1% 9.2% 9.5% 9.3% 1.0% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 0 200 400 60
Slide 12: SG&A Investments Continued
design develop deliver advanced technology 12 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
Slide 13: Cash Flow / Working Capital Highlights
design develop deliver advanced technology 13 (In millions) Mar 31 , 2017 Dec 31 , 2016 Mar 31, 2016 Cash Flow from Operations $78 $44 $77 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 Accounts Payable $344
Slide 14: Working Capital Update
design develop deliver advanced technology 14 Working Capital Update Exceeded 73 - day target for Q1 2017 99 83 80 74 67 0 20 40 60 80 100 120 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 6
Slide 15: Second Quarter 2017 Guidance
design develop deliver advanced technology 15 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 Second Quar
Slide 16: Q2 2017 Outlook by Market
design develop deliver advanced technology 16 Higher - Value Markets Q2 - 17 Outlook (%) Industrials Aerospace & Defense Down Low - Singles Up Low - Singles Medical Up Low - Singles Test & Instrumentation Up Low - Singles Traditional Markets Q2 - 17 Outlook (%) Computing Up ~20% Telecommunication s
Slide 17: Appendix
design develop deliver advanced technology 17 Appendix
Slide 18: Reconciliation of GAAP to non-GAAP Financial Results
design develop deliver advanced technology 18 APPENDIX 1 - Reconciliation of GAAP to non - GAAP Financial Results (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) March 31, December 31, March 31, 2017 2016 2016 $ 12,417 $ 23,548 $ 16,268 1,511 2,663 2,789 5,120 - - 2,481 2,893 2,804 $ 21,
Slide 19: Reconciliation of GAAP to non-GAAP Financial Measures
design develop deliver advanced technology 19 APPENDIX 2 - Reconciliation of GAAP to non - GAAP Financial Measures (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) 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$