Slide 1: Q3 2016 Earnings Presentation
design develop deliver advanced technology Q3 - 2016 Earnings Presentation October 20, 2016
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 2016 Summary
design develop deliver advanced technology 4 Third Quarter 2016 Summary Revenue and operating margins within guidance ▪ Strong demand in Test & Instrumentation market ▪ Delays in Telco product ramps ▪ Modest improvement in gross margins even with revenue declines Good progress on working capital man
Slide 5: Looking Ahead – Speed is the Critical Factor
design develop deliver advanced technology 5 Looking Ahead – Speed is the Critical Factor Company Has the Right Strategy ▪ Transition portfolio to higher - value markets ▪ Drive engineering - led solutions Priority Is Revenue G rowth ▪ Increase bookings to achieve growth beyond 2017 ▪ Leverage i nve
Slide 6: Q3 2016 Financial Highlights
design develop deliver advanced technology 6 Q3 2016 Financial Highlights
Slide 7: Third Quarter 2016 Financial Summary
design develop deliver advanced technology 7 (In millions, except EPS) Sep 30 , 2016 Jun 30 , 2016 Q/Q Sep 30 , 2015 Y/Y Net Sales $574 $579 (1%) $630 (9%) Non - GAAP Operating Margin 4.3% 4.2% 10 bps 4.5% (20 bps) Non - GAAP Diluted EPS $0.36 $0.35 3% $0.43 ( 16%) GAAP Operating Margin 3.1% 3.1% --
Slide 8: Benchmark Revenue Results by Market Sector
design develop deliver advanced technology 8 Higher - Value Markets Sep 30 , 2016 Jun 30 , 2016 Q/Q Industrials 38% $217 37% $214 2% Medical 15% $86 16% $92 (7%) Test & Instrument. 11% $66 10% $60 9% Total Revenue $369 $366 1% Traditional Markets Sep 30 , 2016 Jun 30 , 2016 Q/Q Computing 19% $107 21
Slide 9: Key Business Trends
design develop deliver advanced technology 9 28.3 30.1 21.9 24.3 24.7 4.5% 4.8% 4.0% 4.2% 4.3% 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 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 630 626 549 579 574 8.7% 9.1% 9.2% 9.1% 9.2% 1.0% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 0 200 400 600
Slide 10: Cash Flow / Working Capital Highlights
design develop deliver advanced technology 10 (In millions) Sep 30 , 2016 Jun 30 , 2016 Sep 30, 2015 Cash Flows from (used in) Operations $70 $81 $78 FCF $61 $73 $70 Cash $636 $573 $462 International $592 $534 $409 US $44 $39 $53 Total Cost of Shares Repurchased $12 $15 $18 Inventory $396 $375 $422
Slide 11: Working Capital Update
design develop deliver advanced technology 11 Working Capital Update We are committed to a 75 - day target exiting the year 99 91 90 94 99 83 80 75 30 50 70 90 110 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Target Accounts Receivable Days Accounts Payable Days Inventory Days Q1-15 Q2-15 Q3-15 Q
Slide 12: Share Repurchases
design develop deliver advanced technology 12 Share Repurchases 37 th Consecutive Quarter of Stock Repurchases $531 million returned to shareholders since 2007 $94 m illion remaining on authorized purchase plan Inception to 2016 2011 - 2016 Last 3 Years $US Stock Repurchases (M ) $531 $298 $164 Buyb
Slide 13: New Business Wins by Segment
design develop deliver advanced technology 13 New Business Wins by Segment ▪ 29 manufacturing and 20 engineering project awards ▪ Estimated annual revenue run rate between $110 - 135 million ▪ Continued new business wins in targeted markets Estimated Annual Revenue from New Business Wins Third Quart
Slide 14: Fourth Quarter 2016 Guidance
design develop deliver advanced technology 14 Guidance Net Sales (in millions) $590 – $610 Operating Margin – non - GAAP* 4.4% – 4.8% Interest Expense (in millions) $2.3 Effective Tax Rate 22% Diluted EPS – GAAP $0.33 – $0.37 Diluted EPS – non - GAAP* $0.39 – $0.43 * The above guidance excludes the
Slide 15: Benchmark Revenue Outlook by Market Sector
design develop deliver advanced technology 15 Higher - Value Markets Jun 30 , 2016 Sep 30 , 2016 Q4 - 16 Outlook (%) Industrials 37% $214 38% $217 Up Mid - to High Singles Medical 16% $92 15% $86 Up Mid - Singles Test & Instrumentation 10% $60 11% $66 Down High Singles Total Revenue $366 $369 Tradit
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) Sep 30, Jun 30, Sep 30, 2016 2016 2015 2016 2015 $ 18,082 $ 17,740 $ 26,148 $ 52,090 $ 71,064 3,485 3,602 1,096 9,876 7,553 3,