Benchmark Electronics, Inc. · NYSE:BHE

Benchmark Electronics — Q3 2015 Earnings Presentation

15 slides from Benchmark Electronics's earnings presentation, Oct 22, 2015

  1. Slide 1: Third Quarter 2015 Earnings Release Conference Call

    Third Quarter 2015 Earnings Release Conference Call October 22, 2015

  2. Slide 2: Forward-Looking Statements

    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 the negatives thereof, often identify forward-look

  3. Slide 3: Benchmark to Acquire Secure Technology

    Benchmark to Acquire Secure Technology Secure Technology is a leading national industrial, aerospace, and defense company, with specialization in rugged, mission-critical communications and connectivity solutions. Electronic Systems, Key Business Highlights Sub-Systems and Components • Encrypted Com

  4. Slide 4: Secure Meets our Acquisition Objectives

    Secure Meets our Acquisition Objectives Acquisition Focus Characteristics • World-class technology and engineering expertise further enhance our capabilities • Alignment to Benchmark growth segments in industrial, Strategic aerospace and defense markets • Long-standing relationships with blue chip c

  5. Slide 5: Third Quarter 2015 Highlights

    Third Quarter 2015 Highlights  Non-GAAP operating margin at 4.3% ̶ a 30 basis point year-over-year and ̶ a 10 basis point quarter-over-year improvement  Generated non-GAAP EPS of $0.41  Strong operating cash flow of $78 million  Returned $18 million to shareholders through share repurchases  An

  6. Slide 6: Portfolio Trends – Expanding Solutions

    Portfolio Trends – Expanding Solutions Revenue Mix1 Growth Rates1 Long-Term Drivers 1 CAGR First Nine Months Ended  Engineering-led solutions  Greater outsourcing 42%  High mix/lower volume skills 54% ~10% growth  Longer product life cycles  Value add  Manufacturing solutions 58%  Fully outso

  7. Slide 7: Third Quarter 2015 New Business Wins

    Third Quarter 2015 New Business Wins Q3 2015 Number of New Quarterly Estimated Annual Revenue Business Wins by Segment Run Rate for New Business Wins  Q3 2015: 37 new business bookings, including 16 engineering projects  Estimated annual revenue run rate between $110-130 million  Continued new bu

  8. Slide 8: Third Quarter 2015 Financial Summary

    Third Quarter 2015 Financial Summary For the Three Months Ended (In millions, except EPS) Sept 30, 2015 Jun 30, 2015 Sept 30, 2014 Net Sales $630.2 $664.0 $731.3 Net Income – GAAP $20.6 $21.2 $16.9 Net Income – non-GAAP $21.2 $22.0 $23.2 Diluted EPS – GAAP $0.40 $0.40 $0.31 Diluted EPS – non-GAAP $0

  9. Slide 9: Trending Operating Income

    Trending Operating Income  Continued improvement in operating income percentage  Results from portfolio diversification and operational excellence initiatives design develop deliver advanced technology 9

  10. Slide 10: Financial Statement Highlights

    Financial Statement Highlights Balance Sheet and Cash Flows (In millions) Sept 30, 2015 Jun 30, 2015 Sept 30, 2014 Cash $462.1* $409.3* $420.2 Cash Flows from Operating Activities $78.2 $52.0 $28.2 Capital Expenditures $7.9 $8.2 $6.3 Depreciation & Amortization $12.0 $12.3 $11.8 Accounts Receivable

  11. Slide 11: Working Capital Update

    Working Capital Update Sept 30, 2015 Jun 30, 2015 Accounts Receivable Days 67 68 Accounts Payable Days 42 42 Inventory Days 66 66 Cash Conversion Cycle Days 90 91  Cash Conversion Cycle improved by one day – less than forecasted four-day improvement due to lower sales  Initiatives for working capi

  12. Slide 12: Fourth Quarter 2015 Guidance

    Fourth Quarter 2015 Guidance Guidance Net Sales (in millions) $620 – $640 Operating Margin – non-GAAP 4.3% – 4.7% Effective Tax Rate ~22% Diluted EPS – non-GAAP $0.39 – $0.43  Outlook is for the fourth quarter ending December 31, 2015. design develop deliver advanced technology 12

  13. Slide 13: Benchmark Market Overview

    Benchmark Market Overview Q4-15 Higher Growth Markets Jun 30, 2015 Sept 30, 2015 Outlook (%) Industrial Controls 30% $201 31% $198 Up High Single Digits Medical 14% $90 14% $87 Up High Single Digits Test & Instrumentation 9% $59 9% $58 Down Mid Double Digits Total Revenue $350 $343 Q4-15 Traditional

  14. Slide 14: Summary

    Summary  Key Strategic Initiatives: o Portfolio Diversification o Lean and Operational Excellence o Working Capital Management  Secure Technology Acquisition: o Engineered products and solutions o Mission critical, highly regulated markets o Margin enhancing  Margin Expansion on track towards 4.5

  15. Slide 15: Reconciliation of GAAP to non-GAAP Financial Results

    Reconciliation of GAAP to non-GAAP Financial Results (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) Three Months Ended Nine Months Ended Sep 30, Jun 30, Sep 30, September 30, 2015 2015 2014 2015 2014 Income from operations (GAAP) $ 26,148$ $ 26,208$ $ 21,915 $ 71,064$ $ 71,491 Restructu

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