Slide 1: Benchmark Electronics, Inc. Q2 2019 Earnings
© 2018 Benchmark Electronics, Inc. Benchmark Electronics, Inc. Q2 2019 Earnings July 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 ► Began as CEO on March 18, 2019 ► +25 years in technology industry ► Deep experience with products & solutions
Slide 4: Second Quarter 2019 Summary
© 2018 Benchmark Electronics, Inc. | 4 Second Quarter 2019 Summary Revenue above guidance and non - GAAP diluted EPS within g uidance ► Year - over - year and sequential revenue growth in A&D and Medical ► Non - GAAP gross margins increased 10 bps sequentially to 8.9 % Improving gross margins ► Excl
Slide 5: Executive Team Updates
© 2018 Benchmark Electronics, Inc. | 5 Executive Team Updates • Former Vice President, Celestica Global Sales ATS • Past sales leadership roles at QLogic, Quantum, Dell, Silicon Graphics • B.S. mechanical e ngineering Texas A&M University • MBA Pepperdine University Rob Crawford – Chief Revenue Offi
Slide 6: CFO Updates & Q2 Financial Highlights
| 6 © 2018 Benchmark Electronics, Inc. CFO Updates & Q2 - 19 Financial Highlights Roop Lakkaraju Chief Financial Officer
Slide 7: Second Quarter 2019 Financial Summary
© 2018 Benchmark Electronics, Inc. | 7 Second Quarter 2019 Financial Summary For the Three Months Ended (In millions, except EPS) June 30 , 2019 Mar. 31 , 2019 Q/Q June 30 , 2018 Y/Y Net Sales $602 $603 -- $661 (9%) GAAP Operating Margin 2.0% 2.7% (70) bps 2.2% (20 bps) GAAP Diluted EPS $0.24 $0.34
Slide 8: Revenue by Market Sector
© 2018 Benchmark Electronics, Inc. | 8 Higher - Value Markets June 30 , 2019 Mar. 31 , 2019 Q/Q Industrials 19% $115 20% $116 (1%) Aerospace & Defense 18% $107 17% $104 3% Medical 19% $114 17% $103 10% Semi - Cap 10% $63 11% $66 (5%) Total Revenue $399 $389 3% Revenue by Market Sector (1) In million
Slide 9: New Business Wins with Focus on Market Sector Sales
© 2018 Benchmark Electronics, Inc. | 9 New Business Wins with Focus on Market Sector Sales Q2 - 19 New Business Wins by Segment Estimated Annual Revenue from New Business Wins ► 28 manufacturing and 25 engineering project awards Q2 New Business Wins Highlights: Industrials 6% • Transportation infras
Slide 10: GAAP Key Business Trends
© 2018 Benchmark Electronics, Inc. | 10 GAAP Key Business Trends Return on Invested Capital (LTM) Operating Margin ($M) SG&A ($M) Revenue & Gross Margin ($ M ) NOPAT Inv. Capital 14.3 11.0 15.3 16.1 11.9 2.2% 1.7% 2.3% 2.7% 2.0% 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
Slide 11: Non-GAAP Key Business Trends
© 2018 Benchmark Electronics, Inc. | 11 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 Capital for last 5 quarters] 35.8 35.9 34.0 35
Slide 12: Cash Flow / Working Capital Highlights
© 2018 Benchmark Electronics, Inc. | 12 Cash Flow / Working Capital Highlights (1) Free cash flow (FCF) defined as net cash provided by operations (GAAP) less capex (In millions) June 30 , 2019 Mar. 31 , 2019 June 30 , 2018 Cash Flows from (used in) Operations $52 $16 ($41) FCF $47 $6 ($58) Cash $39
Slide 13: Working Capital Update
© 2018 Benchmark Electronics, Inc. | 13 Working Capital Update Q2 - 17 Q3 - 17 Q4 - 17 Q1 - 18 Q2 - 18 Q3 - 18 Q4 - 18 Q1 - 19 Q2 - 19 Accounts Receivable Days 57 61 59 59 61 64 64 61 54 Contract Asset Days 22 24 20 22 20 22 19 23 23 Inventory Days 45 46 40 50 47 49 46 52 52 Deposits 4 4 3 3 2 4 4 3
Slide 14: Capital Allocation Update
© 2018 Benchmark Electronics, Inc. | 14 Capital Allocation Update Dividends ► Recurring quarterly dividend of $0.15 per share announced in March 2018 ► Dividend of $5.9 million paid in April 2019 Share repurchases ► Share repurchases of $100 million completed in YTD 2019 ► Remaining authorization to
Slide 15: Third Quarter 2019 Guidance
© 2018 Benchmark Electronics, Inc. | 15 Third 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) $ 525 – $555 Diluted EPS – non - GAAP* $0.33 – $ 0.39
Slide 16: Sequential Modeling Information
© 2018 Benchmark Electronics, Inc. | 16 Sequential Modeling Information ( Including Legacy Computing Contract) Higher - Value Markets Q3 - 19 Outlook (%) Industrials Flat Aerospace & Defense Up High Singles Medical Up Low Singles Semi - Cap Flat Traditional Markets Q3 - 19 Outlook (%) Computing Down
Slide 17: Strategic Initiative Updates
© 2018 Benchmark Electronics, Inc. | 17 Strategic Initiative Updates Jeff Benck - CEO
Slide 18: Key Strategic Initiatives
© 2018 Benchmark Electronics, Inc. | 18 Key Strategic Initiatives Optimize Go - to - Market 1 2 3 4 Drive Operational Efficiencies Centralize G&A Accelerate Eng. Services & Solutions • Realigned organization • Merged sectors, business dev., & marketing • H ired new role Chief Revenue Officer (CRO) •
Slide 19: Summary
© 2018 Benchmark Electronics, Inc. | 19 Summary Sector outlook ► Semi - cap: Awaiting customer forecast for 2020 recovery; winning new programs ► Medical and A&D: Continued 2H - 19 growth with momentum into next year ► Industrial: New sector leadership with better focus and execution on right target
Slide 20: Appendix
| 20 © 2018 Benchmark Electronics, Inc. Appendix
Slide 21: Appendix 1 - Reconciliation of GAAP to Non-GAAP Financial Results
design develop deliver advanced technology 21 © 2018 Benchmark Electronics, Inc. | 21 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 appl
Slide 22: Appendix 2 - Reconciliation of GAAP to Non-GAAP Financial Measures
design develop deliver advanced technology 22 © 2018 Benchmark Electronics, Inc. | 22 APPENDIX 2 - Reconciliation of GAAP to non - GAAP Financial Measures (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) Jun 30, 2019 Mar 31, 2019 Jun 30, 2018 GAAP gross profit 52,998$ 53,800$ 54,299$ Sett
Slide 23: Appendix 3 - Reconciliation of Free Cash Flow
design develop deliver advanced technology 23 © 2018 Benchmark Electronics, Inc. | 23 APPENDIX 3 - Reconciliation of Free Cash Flow (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) Jun 30, 2019 Mar 31, 2019 Jun 30, 2018 Net Cash provided by Operations 52,358$ 16,414$ (40,712)$ Additions t