Slide 1: Q3 2017 Earnings Presentation
design develop deliver advanced technology Q3 2017 Earnings Presentation October 18, 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: Third Quarter 2017 Summary
design develop deliver advanced technology 4 Third Quarter 2017 Summary Revenue and non - GAAP operating margins exceeded the high end of guidance ▪ Revenues up 5 %, third consecutive quarter of year - over - year growth ▪ Gross margins at 9.4%, a 2 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 ▪ 31 manufacturing and 14 engineering project awards ▪ Estimated annual revenue run rate between $138 – 165 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 relocated to Arizona ▪ Continued focus on network optimization and asset velocity Implementation of market - sector sales organizatio
Slide 7: Current Progress Milestones
design develop deliver advanced technology 7 Current Progress Milestones * Waypoint r epresents LTM target based on non - GAAP Operating Income
Slide 8: Q3 2017 Financial Highlights
design develop deliver advanced technology 8 Q3 2017 Financial Highlights
Slide 9: Third Quarter 2017 Financial Summary
design develop deliver advanced technology 9 (In millions, except EPS) Sep 30 , 2017 Jun 30 , 2017 Q/Q Sep 30 , 2016 Y/Y Net Sales $604 $617 (2%) $574 5% GAAP Operating Margin 3.4% 3.6% (20 bps) 3.1% 30 bps GAAP Diluted EPS $0.35 $0.34 2% $0.44 (20%) Non - GAAP Operating Margin 4.1% 4.1% -- 4.3% (20
Slide 10: Revenue by Market Sector
design develop deliver advanced technology 10 Higher - Value Markets Sep 30 , 2017 Jun 30 , 2017 Q/Q Industrials 20% $124 20% $124 -- Aerospace & Defense 16% $96 16% $100 (4%) Medical 17% $101 14% $86 16% Test & Instrument. 15% $88 15% $89 (1%) Total Revenue $409 $399 2% Traditional Markets Sep 30 ,
Slide 11: GAAP Key Business Trends
design develop deliver advanced technology 11 18.1 23.5 12.4 22.2 20.8 3.1% 3.9% 2.2% 3.6% 3.4% 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 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 574 608 567 617 604 9.2% 9.5% 8.7% 9.5% 9.6% 1.0% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 0 200 400 60
Slide 12: Non-GAAP Key Business Trends
design develop deliver advanced technology 12 24.7 29.1 21.5 25.5 24.5 4.3% 4.8% 3.8% 4.1% 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 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 574 608 567 617 604 9.2% 9.5% 9.3% 9.4% 9.4% 1.0% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 0 200 400 60
Slide 13: Cash Flow / Working Capital Highlights
design develop deliver advanced technology 13 (In millions) Sep 30 , 2017 Jun 30 , 2017 Sep 30, 2016 Cash Flow from Operations ($3) $15 $70 FCF ($14) ($4) $61 Cash $730 $749 $636 International $655 $657 $592 US $75 $92 $44 Inventory $422 $416 $396 Accounts Receivable $412 $392 $417 Accounts Payable
Slide 14: Working Capital Update
design develop deliver advanced technology 14 Working Capital Update Increase in cycle days for inventory positioning 99 83 80 74 67 65 72 0 20 40 60 80 100 120 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Accounts Receivable Days Accounts Payable Days Inventory Days Deposits Q1-16 Q2-16 Q3-16 Q4-16 Q1
Slide 15: Fourth Quarter 2017 Guidance
design develop deliver advanced technology 15 Guidance Net Sales (in millions) $590 – $610 Operating Margin – non - GAAP* 3.8% – 4.1% Diluted EPS – non - GAAP* $0.34 – $0.38 * The above guidance excludes the impact of amortization of intangible assets and estimated restructuring charges Fourth Quart
Slide 16: Q4 Outlook by Market and Modeling Information
design develop deliver advanced technology 16 Higher - Value Markets Q4 - 17 Outlook (%) Industrials Aerospace & Defense Flat Up Mid - Singles Medical Down Low Singles Test & Instrumentation Down Low Singles Traditional Markets Q4 - 17 Outlook (%) Computing Down Mid - Singles Telecommunication s Up
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)
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)