Slide 1: Q2 2017 Earnings Presentation
design develop deliver advanced technology Q2 2017 Earnings Presentation July 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: Second Quarter 2017 Summary
design develop deliver advanced technology 4 Second Quarter 2017 Summary Revenue and non - GAAP operating margins exceeded the high end of guidance ▪ Revenues up 6%, second consecutive quarter of year - over - year growth ▪ Gross margins at 9.4%, a 3 0 bps year - over - year improvement ▪ Non - GAAP
Slide 5: 2017 New Business Wins by Segment
design develop deliver advanced technology 5 2017 New Business Wins by Segment ▪ 25 manufacturing and 14 engineering project awards ▪ Estimated annual revenue run rate between $129 – 155 million ▪ Continued new business wins in target markets Estimated Annual Revenue from New Business Wins New Busin
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 ▪ C orporate headquarters relocation to Arizona substantially completed in Q3 ▪ New EVP of Operations, Mike Buseman , begins in August ▪ Continued focus on net
Slide 7: Current Progress Milestones
design develop deliver advanced technology 7 Current Progress Milestones $29* * Waypoint represent LTM target
Slide 8: Q2 2017 Financial Highlights
design develop deliver advanced technology 8 Q2 2017 Financial Highlights
Slide 9: Second Quarter 2017 Financial Summary
design develop deliver advanced technology 9 (In millions, except EPS) Jun 30 , 2017 Mar 31 , 2017 Q/Q Jun 30 , 2016 Y/Y Net Sales $617 $567 9% $579 6% Non - GAAP Operating Margin 4.1% 3.8% 30 bps 4.2% (10 bps) Non - GAAP Diluted EPS $0.38 $0.34 12% $0.35 9% GAAP Operating Margin 3.6% 2.2% 140 bps 3
Slide 10: Revenue by Market Sector
design develop deliver advanced technology 10 Higher - Value Markets Jun 30 , 2017 Mar 31 , 2017 Q/Q Industrials 20% $124 21% $118 5% Aerospace & Defense 16% $100 18% $104 (4%) Medical 14% $86 15% $86 -- Test & Instrument. 15% $89 14% $77 16% Total Revenue $399 $385 4% Traditional Markets Jun 30 , 2
Slide 11: Key Business Trends
design develop deliver advanced technology 11 24.3 24.7 29.1 21.5 25.5 4.2% 4.3% 4.8% 3.8% 4.1% 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 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 579 574 608 567 617 9.1% 9.2% 9.5% 9.3% 9.4% 1.0% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 0 200 400 60
Slide 12: Cash Flow / Working Capital Highlights
design develop deliver advanced technology 12 (In millions) Jun 30 , 2017 Mar 31 , 2017 Jun 30, 2016 Cash Flow from Operations $15 $78 $81 FCF ($4) $70 $73 Cash $749 $752 $573 International $657 $659 $535 US $92 $93 $38 Inventory $416 $404 $375 Accounts Receivable $392 $381 $422 Accounts Payable $34
Slide 13: Working Capital Update
design develop deliver advanced technology 13 Working Capital Update Improved cash conversion cycle by 2 days 99 83 80 74 67 65 0 20 40 60 80 100 120 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Accounts Receivable Days Accounts Payable Days Inventory Days Deposits Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Account
Slide 14: Third Quarter 2017 Guidance
design develop deliver advanced technology 14 Guidance Net Sales (in millions) $575 – $595 Operating Margin – non - GAAP* 3.7% – 4.0% Diluted EPS – non - GAAP* $0.32 – $0.36 * The above guidance excludes the impact of amortization of intangible assets and estimated restructuring charges Third Quarte
Slide 15: Market Outlook and Modeling Information
design develop deliver advanced technology 15 Higher - Value Markets Q3 - 17 Outlook (%) Industrials Aerospace & Defense Up Low - Singles Up Mid - Singles Medical Up ~10% Test & Instrumentation Down ~10% Traditional Markets Q3 - 17 Outlook (%) Computing Down > 20% Telecommunication s Down >10% Model
Slide 16: Appendix
design develop deliver advanced technology 16 Appendix
Slide 17: Reconciliation of GAAP to non-GAAP Financial Results
design develop deliver advanced technology 17 APPENDIX 1 - Reconciliation of GAAP to non - GAAP Financial Results (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) Jun 30, Mar 31, Jun 30, 2017 2017 2016 2017 2016 22,227$ 12,417$ 17,740$ 34,644$ 34,008$ 1,544 1,511 3,602 3,055 6,391 (710) 5
Slide 18: Reconciliation of GAAP to non-GAAP Financial Measures
design develop deliver advanced technology 18 APPENDIX 2 - Reconciliation of GAAP to non - GAAP Financial Measures (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) Jun 30, 2017 June 30, 2016 GAAP gross profit 58,587 $ 52,854 $ Customer i nsolvency ( r ecovery) (710) - Non - GAAP gross pro