Slide 1: Benchmark Electronics, Inc. Q3 2019 Earnings
© 2018 Benchmark Electronics, Inc. Benchmark Electronics, Inc. Q3 2019 Earnings October 24, 2019
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: CEO Perspective
| 3 © 2018 Benchmark Electronics, Inc. CEO Perspective Jeff Benck President & Chief Executive Officer
Slide 4: Third Quarter 2019 Summary
© 2018 Benchmark Electronics, Inc. | 4 Third Quarter 2019 Summary Revenue at high end of guidance and earnings in line ► Year - over - year and sequential revenue growth in A&D and Medical ► Semi - cap down 11% year - over - year but sequential growth from June quarter Improving margins ► Non - GAAP
Slide 5: Notable New Business Wins by Market Sector
© 2018 Benchmark Electronics, Inc. | 5 Notable New Business Wins by Market Sector Industrials • Advanced IoT transportation sensors (process design, & mfg.) • Industrial infrastructure controls (mfg.) Medical • Platform of minimally invasive surgical devices (mfg .) • Defibrillator s (mfg .) Semi -
Slide 6: CFO Updates & Q3 Financial Highlights
| 6 © 2018 Benchmark Electronics, Inc. CFO Updates & Q3 - 19 Financial Highlights Roop Lakkaraju Chief Financial Officer
Slide 7: Third Quarter 2019 Financial Summary
© 2018 Benchmark Electronics, Inc. | 7 Third Quarter 2019 Financial Summary For the Three Months Ended (In millions, except EPS) Sept. 30 , 2019 June 30 , 2019 Q/Q Sept. 30 , 2018 Y/Y Net Sales $555 $602 (8%) $641 (13%) GAAP Operating Margin 1.8% 2.0% (20) bps 1.7% 10 bps GAAP Diluted EPS $0.19 $0.2
Slide 8: Revenue by Market Sector
© 2018 Benchmark Electronics, Inc. | 8 Higher - Value Markets Sept. 30 , 2019 June 30 , 2019 Q/Q Industrials 21% $115 19% $115 -- Aerospace & Defense 21% $115 18% $107 8% Medical 23% $128 19% $114 12% Semi - Cap 12% $68 10% $63 9% Total Revenue $426 $399 7% Revenue by Market Sector (1) In millions T
Slide 9: GAAP Key Business Trends
© 2018 Benchmark Electronics, Inc. | 9 GAAP Key Business Trends Return on Invested Capital (LTM) Operating Margin ($M) SG&A ($M) Revenue & Gross Margin ($ M ) NOPAT Inv. Capital 11.0 15.3 16.1 11.9 9.8 1.7% 2.3% 2.7% 2.0% 1.8% 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
Slide 10: Non-GAAP Key Business Trends
design develop deliver advanced technology 10 © 2018 Benchmark Electronics, Inc. | 10 Non - GAAP Key Business Trends Operating Margin ($M) SG&A ($M) Revenue & Gross Margin ($ M ) NOPAT Inv. Capital Non - GAAP ROIC = (Non - GAAP TTM income from operations – Non - GAAP Tax Impact) · [Average Invested
Slide 11: Cash Flow / Working Capital Highlights
© 2018 Benchmark Electronics, Inc. | 11 Cash Flow / Working Capital Highlights (1) Free cash flow (FCF) defined as net cash provided by operations (GAAP) less capex (In millions) Sept. 30 , 2019 June 30 , 2019 Sept. 30 , 2018 Cash Flows from (used in) Operations ($11) $52 ($1) FCF ($22) $47 ($16) Ca
Slide 12: Working Capital Update
© 2018 Benchmark Electronics, Inc. | 12 Working Capital Update Q3 - 17 Q4 - 17 Q1 - 18 Q2 - 18 Q3 - 18 Q4 - 18 Q1 - 19 Q2 - 19 Q3 - 19 Accounts Receivable Days 61 59 59 61 64 64 61 54 56 Contract Asset Days 24 20 22 20 22 19 23 23 26 Inventory Days 46 40 50 47 49 46 52 52 57 Deposits 4 3 3 2 4 4 3 3
Slide 13: Capital Allocation Update
© 2018 Benchmark Electronics, Inc. | 13 Capital Allocation Update Dividends ► Recurring quarterly dividend of $0.15 per share declared ► Dividend of $5.7 million paid in July 2019 Share repurchases ► Share repurchases of $118 million completed as of September 30, 2019 ► Remaining authorization to re
Slide 14: Fourth Quarter 2019 Guidance
© 2018 Benchmark Electronics, Inc. | 14 Fourth Quarter 2019 Guidance * The above guidance excludes the impact of amortization of intangible assets and estimated restructuring charges and other costs Guidance Net Sales (in millions) $ 520 – $570 Diluted EPS – non - GAAP* $0.34 – $ 0.42
Slide 15: Sequential Modeling Information (Excluding Legacy Computing Contract)
© 2018 Benchmark Electronics, Inc. | 15 Sequential Modeling Information ( Excluding Legacy Computing Contract) Higher - Value Markets Q4 - 19 Outlook (%) Industrials Flat Aerospace & Defense Flat Medical Down Mid Singles Semi - Cap Up >10% Traditional Markets Q4 - 19 Outlook (%) Computing Down > 20%
Slide 16: Strategic Initiative Updates
© 2018 Benchmark Electronics, Inc. | 16 Strategic Initiative Updates Jeff Benck - CEO
Slide 17: Key Strategic Initiatives
© 2018 Benchmark Electronics, Inc. | 17 Key Strategic Initiatives Optimize Go - to - Market 1 2 3 4 Drive Operational Efficiencies Centralize G&A Accelerate Eng. Services & Solutions • Organization realignment complete • Sectors, Marketing, New Business teams and Account Managers under Chief Revenue
Slide 18: Appendix
| 18 © 2018 Benchmark Electronics, Inc. Appendix
Slide 19: Appendix 1 - Reconciliation of GAAP to non-GAAP Financial Results
design develop deliver advanced technology 19 © 2018 Benchmark Electronics, Inc. | 19 APPENDIX 1 - Reconciliation of GAAP to non - GAAP Financial Results (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) (1) This amount represents the tax impact of the non-GAAP adjustments using the applic
Slide 20: Appendix 2 - Reconciliation of GAAP to Non-GAAP Financial Measures
design develop deliver advanced technology 20 © 2018 Benchmark Electronics, Inc. | 20 APPENDIX 2 - Reconciliation of GAAP to Non - GAAP Financial Measures (Amounts in Thousands) – (UNAUDITED) Three Months Ended Sep 30, 2019 Jun 30, 2019 Sep 30, 2018 GAAP SG&A Expenses $ 34,875 $ 35,282 $ 37,607 Cust
Slide 21: Appendix 3 - Reconciliation of Free Cash Flow
design develop deliver advanced technology 21 © 2018 Benchmark Electronics, Inc. | 21 APPENDIX 3 - Reconciliation of Free Cash Flow (Amounts in Thousands) – (UNAUDITED) Three Months Ended Sep 30, 2019 Jun 30, 2019 Sep 30, 2018 Net Cash Provided by (Used in) Operations $ (11,458) $ 52,358 $ (1,111) A