Benchmarkbench.investorroom.com/download/Benchmark+Investor... · Global provider of engineering services, integrated technology solutions, and ... Concurrent & Sustaining Engineering

BenchmarkInvestor PresentationFebruary 2019

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Forward-Looking StatementsThis document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words “expect,” “estimate,” “anticipate,” “predict” and similar expressions, and the negatives thereof, often identify forward-looking statements, which are not limited to historical facts. Forward-looking statements include, among other things: guidance for 2019 results; statements, express or implied, concerning future operating results or margins, the ability to generate sales and income or cash flow; and Benchmark’s business and growth strategies and expected growth and performance. Although Benchmark believes these statements are based upon reasonable assumptions, they involve risks and uncertainties relating to operations, markets and the business environment generally. If one or more of these risks or uncertainties materializes, or underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Readers are advised to consult further disclosures on these risks and uncertainties, particularly in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and in its subsequent filings with the Securities and Exchange Commission. All forward-looking statements included in this document are based upon information available to the Company as of the date of this document, and it assumes no obligation to update them.

Non-GAAP Financial InformationThis document includes certain financial measures that exclude items and therefore are not in accordance with U.S. generally accepted accounting principles (“GAAP”). A detailed reconciliation between GAAP results and results excluding special items (“non-GAAP”) is included in the Appendix of this document. Management discloses non‐GAAP information to provide investors with additional information to analyze the Company’s performance and underlying trends. Management uses non‐GAAP measures that exclude certain items in order to better assess operating performance and help investors compare results with our previous guidance. This document also references “free cash flow”, which the Company defines as cash flow from operations less additions to property, plant and equipment and purchased software. The Company’s non‐GAAP information is not necessarily comparable to the non‐GAAP information used by other companies. Non‐GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as a measure of the Company’s profitability or liquidity. Readers should consider the types of events and transactions for which adjustments have been made.

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Implementation of ASC 606 – Revenue from Contracts with CustomersEffective January 1, 2018, the Company implemented ASC 606 the accounting standard governing “Revenue from Contracts with Customers” using the full retrospective transition method. Under ASC 606, revenue is recognized as or when the customer obtainscontrol of the goods or services promised in a contract. Given the nature of the terms and conditions in substantially all of the Company’s customer contracts, the Company now recognizes revenue over time (beginning at work-in-process (“WIP”)) for the majority of its contracts. Historical financial information for 2016 and 2017 represented in this presentation has been adjusted to reflect the retrospective implementation of ASC 606.

As part of ASC 606, we are also required to reclassify finished goods and WIP meeting “the over time criteria” from inventory to a new line item called contract assets on the face of the balance sheet. Contract assets are defined as the Company’s right to consideration for work completed but not billed.

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Benchmark: Leading Global Provider of Services & Solutions

Founded:1986

Stock Symbol:NYSE: BHE

Employees:~11,000

Locations:8 countries

Sales Mix:55% United States45% International

Who We Are ► Global provider of engineering services, integrated technology solutions, and

manufacturing services for complex products

► Well positioned to capitalize on increasing outsourcing in higher-value markets: Industrial; Medical; Aerospace and Defense; and Test & Instrumentation

► Strong financial position with attractive cash flow generation and disciplined capital allocation

Our Value Creation Goals► Continue portfolio transition to higher-value markets

at the right balance of mix and profitability

► Overall goal of 6-8% revenue CAGR with >10% annual revenue growth in higher-value markets

► >5.5% non-GAAP operating margin

► Grow ROIC >12% target

► Continue to return FCF to shareholders

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► Design for Manufacturability► Manufacturing Process and Test Development► Concurrent & Sustaining Engineering► Turnkey Product Design► Regulatory Services

LEAD with Engineering Services

Customer Engagement Approach to Drive Revenue & Profit

MERGE with Technical Solutions

UNIFY with Manufacturing Services

► Medical Platforms► Secure Defense Solutions► Surveillance Systems► RF & High Speed Design► IoT Front-End Architecture

► PCBAs, Modules, & Systems► Precision Machining and Grinding► Microelectronics► Logistics and Product Life Cycle Mgt.

Customer

CUSTOMER BENEFITS:• Faster Time-to-Market

• Ability to Prioritize Internal Resources on Differentiating Capabilities

• Multi-valued Partner

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Scottsdale, AZ

Rochester, MN

Suzhou, China

Brasov, Romania

Fredericksburg, VANashua, NH

Angleton, TXTijuana, MexicoMoorpark, CA

Concord, CA

Guaymas, MexicoAyudhaya, ThailandKorat, Thailand

Huntsville, AL

Guadalajara, Mexico

Fremont, CA

San Jose, CA

Santa Ana, CA

Tempe, AZ

Penang, Malaysia

Product Design & Engineering

Technology SolutionsElectronics ManufacturingInternational Purchasing Office

Benchmark Locations

Precision TechnologiesCorporate Headquarters

Almelo, The Netherlands

27 Locations8 Countries~11,000 Employees

Singapore

Austin, TX

Arden Hills, MN

Winona, MN

Phoenix, AZ

© 2018 Benchmark Electronics, Inc.| 7

Aging Population & Increasing Healthcare Needs► Advanced treatment therapies► Remote patient monitoring

► Effective pharmaceutical delivery

► Performance-based outcomes

Requirement for Higher Bandwidth and Speed► Application growth: Smart cities, IoT, asset tracking, autonomous driving

► Convergence of Defense and Telco process requirements

► Electronics value chain: higher chip demand and mixed SMT/ microelectronics subassemblies

Increase in Defense Spending► Upgrade of land, air, and sea platforms

► Sufficiency and capability of munitions

► Advanced electronic warfare and secure communications

► Soldier mobility and lethality

Market Trends Driving Opportunities for Benchmark

Demand for Higher Quality but More

Affordable Healthcare

Deployment of 5G Wireless Technology

Modernization and Refurbishment of

the Military


Investments in Differentiation

Aligning Benchmark to Take Advantage of Market Trends2018 Results*

Turnkey Product DesignQualcomm Partnership

Medical PlatformsFDA Regulatory Mgt.

Medical$394M

Secure Defense Platforms RF & High Speed Design

MicroelectronicsSurveillance Systems

A&D$406M

Engineering ServicesIoT Front-End

RF & High Speed DesignMicroelectronics

Telco$337M

Industrial$493M

T&I$355M

Demand for Higher Quality but More

Affordable Healthcare

Deployment of 5G Wireless Technology

Modernization and Refurbishment of

the Military

*Based on Company results as of 12/31/18; does not include Computing

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Focus on $200B Available Market that is <25% Outsourced

Market Sectors We Serve

High

er-V

alue

Mar

kets

Trad

ition

al64%

36%

Industrials

Aerospace & Defense

Medical

Test & Instrumentation

Telecommunications

High-End Computing

% Revenue LTM as of 12/31/18

• Industrial Automation• Kiosks• Robotics

• Munitions• Ground Vehicles and Aircraft• Secure Communications

• Device Monitors and Programmers• Pumps, Infusion and Glucose Products• Imaging Products

• Satellite Communications Products• Microwave Systems• High-Speed Optical Assemblies

• High-Performance Computing• Data-Center/Cloud Products

• Semi-Capital Equipment

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCOjW27Tdg8kCFUHAYwodupYALQ&url=http://logodatabases.com/thales-logo.html/thales-logo&bvm=bv.106923889,d.cGc&psig=AFQjCNGaFxgbicdK1ccP75LQjU60vCsDdw&ust=1447171853821859

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCOjW27Tdg8kCFUHAYwodupYALQ&url=http://logodatabases.com/thales-logo.html/thales-logo&bvm=bv.106923889,d.cGc&psig=AFQjCNGaFxgbicdK1ccP75LQjU60vCsDdw&ust=1447171853821859

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCJu1quXbg8kCFU_vYwodR8YHDw&url=https://en.wikipedia.org/wiki/File:Rolls-Royce_logo.svg&psig=AFQjCNGNoCTxmiBVAFh4fGw0j1BStdxWYw&ust=1447171419424308

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCJu1quXbg8kCFU_vYwodR8YHDw&url=https://en.wikipedia.org/wiki/File:Rolls-Royce_logo.svg&psig=AFQjCNGNoCTxmiBVAFh4fGw0j1BStdxWYw&ust=1447171419424308

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCOTshfPcg8kCFQHrYwodgjACOQ&url=https://en.wikipedia.org/wiki/File:Baker_Hughes_Logo.png&psig=AFQjCNELgfDgpsy9pUPCWlNulJ8D9NWjJA&ust=1447171717026639

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCOTshfPcg8kCFQHrYwodgjACOQ&url=https://en.wikipedia.org/wiki/File:Baker_Hughes_Logo.png&psig=AFQjCNELgfDgpsy9pUPCWlNulJ8D9NWjJA&ust=1447171717026639

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCNrSmIfdg8kCFVT1Ywod_0oLYQ&url=https://www.viasat.com/newsroom&psig=AFQjCNHhohAl39H4MCmPxKGLL5amCvRpyA&ust=1447171756720960

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCNrSmIfdg8kCFVT1Ywod_0oLYQ&url=https://www.viasat.com/newsroom&psig=AFQjCNHhohAl39H4MCmPxKGLL5amCvRpyA&ust=1447171756720960

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjMlKe5wezPAhWlx4MKHZBBASQQjRwIBw&url=http://www.danaher.com/news/news-releases/danaher-announces-new-diversified-industrial-growth-company-be-named-fortive&psig=AFQjCNF05FjluxU4nBEtXbXpvoPdvIvGoA&ust=1477160399906807

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjMlKe5wezPAhWlx4MKHZBBASQQjRwIBw&url=http://www.danaher.com/news/news-releases/danaher-announces-new-diversified-industrial-growth-company-be-named-fortive&psig=AFQjCNF05FjluxU4nBEtXbXpvoPdvIvGoA&ust=1477160399906807

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• Complexity• Increasing outsourcing• Engineering-led solutions• Longer product lifecycles• High-mix/lower-volume skills• Higher-value add

• Fully outsourced• Software replacing hardware• Manufacturing solutions• Shorter product lifecycles• Mid-mix/mid-volume skills• Higher customer concentration

Traditional Market Revenue ($M)

Higher-value Market Revenue ($M)

We are Successfully Transitioning to Higher-value MarketsTraditional Market Characteristics

Higher-value Market Characteristics

$1,416 $1,176$819 $846 $918

51% 46% 35% 35% 36%

10.0%

30.0%

50.0%

70.0%

90.0%

110.0%

130.0%

150.0%

170.0%

190.0%

0

500

1,000

1,500

2,000

2014 2015 2016 2017 2018

$1,381 $1,365 $1,503 $1,608 $1,648

49% 54% 65% 65% 64%

10.0%

30.0%

50.0%

70.0%

90.0%

110.0%

130.0%

150.0%

170.0%

190.0%

0

500

1,000

1,500

2,000

2,500

3,000

2014 2015 2016 2017 2018

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8294

8267 68

0

0.2

0.4

0.6

0.8

1

1.2

50

60

70

80

90

100

110

120

2014 2015 2016 2017 2018

Revenue & GAAP Gross Margins ($M)

GAAP Operating Margin ($M)

Transition Improves Customer Diversification and GAAP Margins

GAAP SG&A ($M)

Cash Conversion Cycle (days)**

2,797 2,541 2,322 2,454 2,566

7.9% 8.6% 9.2% 9.2% 8.6%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2014 2015 2016 2017 2018

112 107 116 130 1434.0% 4.2%

5.0% 5.3% 5.6%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0

20

40

60

80

100

120

140

160

180

200

2014 2015 2016 2017 2018

100.1 93.0 76.9 76.858.5

3.6% 3.7% 3.3% 3.1%2.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0.0

50.0

100.0

150.0

200.0

2014 2015 2016 2017 2018** Trailing four quarter average at December 31, except LTM 9/30/18

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8294

8267 68

0

0.2

0.4

0.6

0.8

1

1.2

50

60

70

80

90

100

110

120

2014 2015 2016 2017 2018

Revenue & Non-GAAP Gross Margins ($M)

Non-GAAP Operating Margin ($M)*

Transition Improves Customer Diversification and Non-GAAP Margins

Non-GAAP SG&A ($M)

Cash Conversion Cycle (days)**

2,797 2,541 2,322 2,454 2,566

8.0% 8.6% 9.2% 9.2% 8.6%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2014 2015 2016 2017 2018

112 107 113 129 1414.0% 4.2%

4.9% 5.2% 5.5%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0

20

40

60

80

100

120

140

160

180

200

2014 2015 2016 2017 2018

112.9 111.9 101.2 98.279.9

4.0% 4.4% 4.4% 4.0%3.1%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0.0

50.0

100.0

150.0

200.0

2014 2015 2016 2017 2018* The above excludes the impact of amortization of intangible assets – See Appendix 2 ** Trailing four quarter average at December 31, except LTM 6/30/18


Our Financial Goals

Target Business ModelRevenue $2.8 – $3.2BGross Margin 9.8 – 10%SG&A 4.8 – 4.5%Non-GAAP Operating Income >5.5%ROIC >12%Cash Conversion Cycle <70 Days


Progress Milestones 2H-18

► Strength in Computing drove shortfall to 2H-18 Waypoint

► Excluding legacy contract range was 72% - 75%

► Higher mix of Computing and lower mix of T&I pressured margins

► Improving sequential margin without legacy Computing

► Achieved 2H-18 Waypoint

► Lower utilization from semi cap softness

► Below target from increased capacity ahead of ramps

$156 $171 $177 $175 $198 $200

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 2H-2018 Waypoint

Bookings (M$)

63% 69% 64% 63% 61%

75% 75% 75% 72% 72%

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 2H-2018 Waypoint

Higher-Value Market Revenue Mix

As ReportedW/O Legacy Computing Contract

9.1% 9.5%8.2% 8.5% 8.4%

10.4% 10.1%9.2% 9.3% 9.5%

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 2H-2018 Waypoint

Gross Margin


>9.7%

$26$24 $23 $22 $20

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 2H-2018 Waypoint

LTM Profit per Square Foot ($)

>67%

$29

| 15

$38731%

$33126%

$54043%

Repurchases Capex

ROIC: Key Determinant of Capital Allocation StrategyCumulative capital allocation FY11– FY18

► Organic growth through targeted investments to extend business model to attractive market opportunitiesC

apex

► Fund investments in bolt-on M&A to expand technical skills for core capability expansionM

&A

► Share repurchases optimized for returns based on applicable law

► 46th consecutive quarter of share repurchases► Cumulative $540mm+ (78% of FCF1) spent

Shar

e Re

purc

hase

s

1 Free cash flow (FCF) defined as net cash provided by operations (GAAP) less capex (see Appendix 2 for reconciliation)

M&A

Disciplined and shareholder-friendly approach to capital allocation


Capital Allocation Update

Stock repurchase authorizations in 2018► Q1-18: Board approved stock repurchase of up to an additional $250 million of common stock

► Q4-18: Board approved stock repurchase of up to an additional $100 million of common stock

Recurring dividend initiated Q1-18► Announced first quarterly cash dividend of $0.15 per share to shareholders of record as of

March 29, 2018; dividends were paid in April, July, and October 2018; and January 2019

Accelerated Stock

Repurchase (ASR)

Open Market

Repurchase (OMR)

$50 million ASR Completed

Completed $212 million in 2018

$202 million remaining on existing authorizations$162 million OMR (Dec. 31)

| 17

Our Long-Term Strategy and Value Proposition

Portfolio Management

Margin Expansion

Balanced Capital

Deployment

Overall Goal of 6-8% Revenue CAGR with >10% Annual Growth in Higher-value Markets

► Transitioning our Portfolio to Markets with Higher Growth Rates and Margins• Industrials• Aerospace and Defense• Medical Technologies• Test & Instrumentation (including semi-capital equipment)

>5.5% Long-Term Non-GAAP Operating Margin► Leading with Engineering and Solutions► Driving LEAN and Operational Excellence Initiatives► Optimizing Cost Structure and Capacity

Continue to Return Free Cash Flow to Shareholders► Disciplined capital allocation program emphasizing ROIC accretion from:

• Targeted Strategic Organic Investments• Close-to-Core (Higher-Value) and Highly Adjacent M&A• Share Repurchases• Recurring Quarterly Cash Dividend

Long-term Strategy Drives ROIC >12% Target

| 18

Q4 and 2018Financial Highlights


Fourth Quarter and 2018 SummaryOperational performance

► Revenue and non-GAAP diluted EPS exceeded the high end of Q4 guidance► Full year revenue growth of 5% ► Delivered $1.45 non-GAAP EPS for the full year with $0.41 in Q4

Working capital► Cash conversion cycle of 62 days ending Q4 with an average of 68 days for the year► Full year at the low end of the target range of 73 to 68 days

Cash flow and ROIC► Operating cash flow of $94 million in the quarter and $77 million for the year► ROIC of 9.2%; down 60 bps quarter-over-quarter and 110 bps year-over-year

Capital allocation► Share repurchases of $212M for 2018; $90 million in Q4► Reduced outstanding share count by 17% year-over-year► Remaining authorization as of the end of 2018 was $202M


New Business Wins with Focus on Market Sector Sales

Q4-18 New Business Wins by Segment Estimated Annual Revenue from New Business Wins

► 34 manufacturing and 17 engineering project awards► Estimated annual revenue run rate between $165 – 233 million ► Estimated time to ramp between 12 to 24 months; medical up to 36 months

Q4 New Business Wins Highlights:

Industrials 12% • Smart city connectivity projects (design & mfg.)• Energy electronics control modules (mfg.)

Medical 36% • Oral dental scanner (design & mfg.)• Cardiac monitor (design & mfg.)

T&I 3% • Precision Technology components for front-end semi-capital equipment (mfg.)

A&D 21% • Ground vehicle electronics (mfg.)• Space module components (mfg.)

C&T 28% • Radio module (design support & mfg.)• Imaging electronics (mfg.)

$128 $134 $142 $152 $156 $171 $177 $175

$198

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

$140

$150

$160

$170

$180

$190

$200

Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

$ (USD M)


Fourth Quarter 2018 Financial SummaryFor the Three Months Ended

(In millions, except EPS) Dec. 31, 2018 Sep. 30, 2018 Q/Q Dec. 31, 2017 Y/Y

Net Sales $657 $641 3% $666 (1%)

GAAP Operating Margin 2.3% 1.7% 60 bps 3.3% (100 bps)

GAAP Diluted EPS $0.64 $0.17 282% ($1.54) 142%

Non-GAAP Operating Margin 3.2% 2.9% 30 bps 4.1% (90 bps)

Non-GAAP Diluted EPS $0.41 $0.33 25% $0.49 (16%)

GAAP ROIC 6.2% 7.0% (80 bps) 8.1% (190 bps)

Non-GAAP ROIC 9.2% 9.8% (60 bps) 10.3% (110 bps)

See APPENDIX 1 for a reconciliation of GAAP to non-GAAP Financial Results

Our Guidance for the Fourth Quarter:► Revenue (in millions) $610 – $650► Diluted EPS – non-GAAP $0.32 – $0.40


Higher-Value Markets Dec. 31, 2018 Sep. 30, 2018 Q/Q

Industrials 18% $121 20% $128 (6%)

Aerospace & Defense 16% $105 16% $105 --

Medical 16% $104 15% $96 8%

Test & Instrument. 11% $70 12% $77 (9%)

Total Revenue $400 $406 (2%)

Revenue by Market Sector

(1) In millions

Traditional Markets Dec. 31, 2018 Sep. 30, 2018 Q/Q

Computing 26% $171 23% $146 18%

Telecommunications 13% $86 14% $89 (3%)

Total Revenue $257 $235 10%

Dec. 31, 2017 Y/Y

26% $172 (1%)

11% $77 12%

$249 3%

For the Three Months Ended

Dec. 31, 2017 Y/Y

19% $129 (6%)

15% $95 10%

15% $100 4%

14% $93 (25%)

$417 (4%)

(1) (1) (1)

(1) (1) (1)


GAAP Key Business Trends

Return on Invested Capital (LTM)Operating Margin ($M)

SG&A ($M)Revenue & Gross Margin ($M)

NOPAT Inv. Capital

21.918.0 14.3 11.0

15.3

3.3% 3.0%2.2% 1.7% 2.3%

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

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

33.3 35.7 35.8 37.6 34.0

5.0%5.9% 5.4% 5.9%

5.2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

666 608 661 641 657

9.1% 9.6%8.2% 8.2% 8.4%

1.0%

3.0%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

0

200

400

600

800

1,000

1,200

1,400

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

GAAP ROIC = (GAAP income from operations – GAAP Tax Impact) ÷ (Average Invested Capital for last 5 quarters)

878 850 848 848 829

71 77 70 59 51

8.1% 9.1% 8.2%7.0% 6.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18


Non-GAAP Key Business Trends

Operating Margin ($M)


NOPAT Inv. Capital

Non-GAAP ROIC = (Non-GAAP income from operations – Non-GAAP Tax Impact) ÷[Average Invested Capital for last 5 quarters]

(1) Excludes the impact of customer insolvency.

33.3 35.7 35.8 35.9 34.0

5.0%5.9% 5.4% 5.6% 5.2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18(1) (1)

666 608 661 641 657

9.1% 9.5%8.2% 8.5% 8.4%

1.0%

3.0%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

0

200

400

600

800

1,000

1,200

1,400

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18(1) (1)

27.122.2

18.1 18.5 21.1

4.1% 3.7%2.7% 2.9% 3.2%

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

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18(1) (1)

878 850 848 848 829

91 95 89 83 76

10.3% 11.2% 10.5% 9.8% 9.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

200

400

600

800

1000

1200

1400

1600

1800

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

Return on Invested Capital (LTM)

(1) (1)

(1)(1) (1) (1)

(1) (1) (1)(1)

(1) (1)

(1) (1)


2018 Financial SummaryFor the Twelve Months Ended

(In millions, except EPS) Dec. 31, 2018 Dec. 31, 2017 ‘17 to ’18 ∆ Y/Y

Net Sales $2,566 $2,454 $112 5%

Non-GAAP Gross Margin $221 $227 ($6) (2%)

Non-GAAP Gross Margin % 8.6% 9.2% (60 bps)

Non-GAAP SG&A $141 $129 $12 10%

Non-GAAP SG&A % 5.5% 5.2% 30 bps

Non-GAAP Operating Income $80 $98 ($18) (19%)

Non-GAAP Operating Margin 3.1% 4.0% (90 bps)

Non-GAAP Diluted EPS $1.45 $1.61 ($0.16) (10%)

Non-GAAP ROIC 9.2% 10.3% (110 bps)


2018 Revenue Results by Market Sector

(1) In millions

For the Twelve Months Ended

Higher-Value Markets Up 2% YoY

Higher-Value Markets Dec. 31, 2018 Dec. 31, 2017 Y/Y

Industrials 19% $493 20% $496 (1%)

Aerospace & Defense 16% $406 16% $392 4%

Medical 15% $394 15% $374 5%

Test & Instrument. 14% $355 14% $346 2%

Total Revenue $1,648 $1,608 2%

Traditional Markets Dec. 31, 2018 Dec. 31, 2017 Y/Y

Computing 23% $581 22% $540 7%

Telecommunications 13% $337 13% $306 10%


(1) (1)

(1) (1)


Cash Flow / Working Capital Highlights

(1) Free cash flow (FCF) defined as net cash provided by operations (GAAP) less capex

(In millions) Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2018 Sep. 30, 2018 Dec. 31, 2017

Cash Flows from (used in) Operations $77 $146 $94 ($1) $56

FCF $10 $91 $80 ($16) $39

Cash $458 $743 $458 $476 $743

International $154 $674 $154 $170 $674

US $304 $69 $304 $306 $69

Inventory $310 $269 $310 $321 $269

Accounts Receivable $468 $437 $468 $456 $437

Contract Assets $140 $146 $140 $156 $146

Accounts Payable $422 $363 $422 $374 $363

For the Three Months EndedFor the Twelve Months Ended

1


Working Capital Update

Ongoing Cash Conversion Cycle Days will Range between 73 and 68 Days

Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

Accounts Receivable Days 63 62 57 61 59 59 61 64 64

Contract Asset Days 23 24 22 24 20 22 20 22 19

Inventory Days 39 48 45 46 40 50 47 49 46

Deposits 4 4 4 4 3 3 2 4 4

Accounts Payable Days 52 61 55 55 54 60 57 57 63

Cash Conversion Cycle 69 69 65 72 62 68 69 74 62

69 69 65 72 62 68 69 74 62

0

20

40

60

80

100

120

Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18


First 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) $570 – $610

Diluted EPS – non-GAAP* $0.29 – $0.37

| 30

Appendix 1

| 31

(Amounts in Thousands, Except Per Share Data) – (UNAUDITED)

Appendix 1: Reconciliation of GAAP to non-GAAP

| 32

Appendix 2: GAAP to Non-GAAP Reconciliations

1 Equals line item immediately above divided by revenue (GAAP)

(in millions) 2014 2015 2016 2017 2018

Revenue (GAAP) $2,797.1 $2,540.9 $2,322.3 $2,454.5 $2,566.5

Income from operations (GAAP) $100.1 $93.0 $76.9 $76.8 $58.5

Operating margin (GAAP) 1 3.6% 3.7% 3.3% 3.1% 2.3%Restructuring charges, integration and acquisition costs and other costs 7.1 13.9 12.5 8.6 9.4 Amortization of intangibles 3.8 5.0 11.8 10.1 9.5 Asset impairment charge and other (1.5) - - - - Thailand flood-related items, net of insurance (1.6) - - - - Customer bankruptcy 5.0 - - 2.7 2.5 Non-GAAP income from operations $112.9 $111.9 $101.2 $98.2 $79.9

Non-GAAP operating margin 1 4.0% 4.4% 4.4% 4.0% 3.1%

Net income (GAAP) $81.2 $95.4 $63.9 ($31.9) $22.8Restructuring charges, integration costs and other costs 7.1 13.9 12.5 8.6 9.4 Amortization of intangibles 3.8 5.0 11.8 10.1 9.5 Asset impairment charge and other (1.5) - - - - Refinancing of credit facilities - - - - 2.0 Thailand flood-related items, net of insurance (1.6) - - - - Customer bankruptcy 5.0 - - 2.7 2.5 Tax cuts & Jobs Act - - - 97.6 26.0 Income tax adjustments (3.3) (5.5) (7.6) (6.3) (4.6) Discrete tax benefits - (21.2) (8.3) - - Non-GAAP net income $90.7 $87.6 $72.3 $80.8 $67.6

Net cash provided by operations (GAAP) $135.4 $146.8 $273.1 $145.8 $76.7Additions to property, plant & equipment and software 45.4 38.1 32.3 54.5 66.7 Free Cash Flow $90.0 $108.7 $240.8 $91.3 $10.0

Free cash flow margin 1 3.2% 4.3% 10.4% 3.7% 0.4%

| 33

Appendix 2

© 2018 Benchmark Electronics, Inc.

Benchmark Electronics, Inc.Q4 and FY 2018 EarningsFebruary 7, 2019

| 35

Forward-Looking StatementsThis document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words “expect,” “estimate,” “anticipate,” “predict” and similar expressions, and the negatives thereof, often identify forward-looking statements, which are not limited to historical facts. Forward-looking statements include, among other things: guidance for 2019 results; projected annual revenues resulting from new program bookings; statements, express or implied, concerning future operating results or margins, the ability to generate sales and income or cash flow; and Benchmark’s business and growth strategies and expected growth and performance. Although Benchmark believes these statements are based upon reasonable assumptions, they involve risks and uncertainties relating to operations, markets and the business environment generally. If one or more of these risks or uncertainties materializes, or underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Readers are advised to consult further disclosures on these risks and uncertainties, particularly in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and in its subsequent filings with the Securities and Exchange Commission. All forward-looking statements included in this document are based upon information available to the Company as of the date of this document, and it assumes no obligation to update them.

Non-GAAP Financial InformationThis document includes certain financial measures that exclude items and therefore are not in accordance with U.S. generally accepted accounting principles (“GAAP”). A detailed reconciliation between GAAP results and results excluding special items (“non-GAAP”) is included in the Appendix of this document. Management discloses non‐GAAP information to provide investors with additional information to analyze the Company’s performance and underlying trends. Management uses non‐GAAP measures that exclude certain items in order to better assess operating performance and help investors compare results with our previous guidance. This document also references “free cash flow”, which the Company defines as cash flow from operations less additions to property, plant and equipment and purchased software. The Company’s non‐GAAP information is not necessarily comparable to the non‐GAAP information used by other companies. Non‐GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as a measure of the Company’s profitability or liquidity. Readers should consider the types of events and transactions for which adjustments have been made.

| 36

Implementation of ASC 606 – Revenue from Contracts with CustomersEffective January 1, 2018, the Company implemented ASC 606 the accounting standard governing “Revenue from Contracts with Customers” using the full retrospective transition method. Under ASC 606, revenue is recognized as or when the customer obtainscontrol of the goods or services promised in a contract. Given the nature of the terms and conditions in substantially all of the Company’s customer contracts, the Company now recognizes revenue over time (beginning at work-in-process (“WIP”)) for the majority of its contracts. All historical financial information represented in this presentation has been adjusted to reflect the retrospective implementation of ASC 606.

As part of ASC 606, we are also required to reclassify finished goods and WIP meeting “the over time criteria” from inventory to a new line item called contract assets on the face of the balance sheet. Contract assets are defined as the Company’s right to consideration for work completed but not billed.

| 37

CEO Update


Fourth Quarter and 2018 SummaryOperational performance

► Revenue and non-GAAP diluted EPS exceeded the high end of Q4 guidance► Full year revenue growth of 5% ► Delivered $1.45 non-GAAP EPS for the full year with $0.41 in Q4

Working capital► Cash conversion cycle of 62 days ending Q4 with an average of 68 days for the year► Full year at the low end of the target range of 73 to 68 days

Cash flow and ROIC► Operating cash flow of $94 million in the quarter and $77 million for the year► ROIC of 9.2%; down 60 bps quarter-over-quarter and 110 bps year-over-year

Capital allocation► Share repurchases of $212M for 2018; $90 million in Q4► Reduced outstanding share count by 17% year-over-year► Remaining authorization as of the end of 2018 was $202M


New Business Wins with Focus on Market Sector Sales

Q4-18 New Business Wins by Segment Estimated Annual Revenue from New Business Wins

► 34 manufacturing and 17 engineering project awards► Estimated annual revenue run rate between $165 – 233 million ► Estimated time to ramp between 12 to 24 months; medical up to 36

months

Q4 New Business Wins Highlights:

Industrials 12% • Smart city connectivity projects (design & mfg.)• Energy electronics control modules (mfg.)

Medical 36% • Oral dental scanner (design & mfg.)• Cardiac monitor (design & mfg.)

T&I 3% • Precision Technology components for front-end semi-capital equipment (mfg.)

A&D 21% • Ground vehicle electronics (mfg.)• Space module components (mfg.)

C&T 28% • Radio module (design support & mfg.)• Imaging electronics (mfg.)

$128 $134 $142 $152 $156 $171 $177 $175

$198

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

$140

$150

$160

$170

$180

$190

$200

Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

$ (USD M)


$2,169 $2,243

2017 2018With Legacy Computing ContractWithout Legacy Computing Contract

►$280 - $320M annual Impact

► ~3.5% growth without legacy Computing contract

Impact of Legacy Computing Contract

$2,454

9.2% 8.6%

2017 2018Without Legacy Computing ContractWith Legacy Computing Contract

10.1%9.5%

► 80 to 90 bps favorable annual impact without legacy Computing contract

$2,566

Revenue (M$) Gross Margin %

► Legacy Computing contract that expires Dec. 31, 2019 will not be renewed in its current form

► Recent historical revenue impact in the range of $280M - $320M per year► Resulting annual improvement in gross margin will be 80 to 90 basis points► During the transition in 2019, we will discuss results with and without this contract


Progress Milestones 2H-18

► Strength in Computing drove shortfall to 2H-18 Waypoint

► Excluding legacy contract range was 72% - 75%

► Higher mix of Computing and lower mix of T&I pressured margins

► Improving sequential margin without legacy Computing

► Achieved 2H-18 Waypoint

► Lower utilization from semi cap softness

► Below target from increased capacity ahead of ramps

$156 $171 $177 $175 $198 $200

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 2H-2018 Waypoint

Bookings (M$)

63% 69% 64% 63% 61%

75% 75% 75% 72% 72%

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 2H-2018 Waypoint

Higher-Value Market Revenue Mix


9.1% 9.5%8.2% 8.5% 8.4%

10.4% 10.1%9.2% 9.3% 9.5%

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 2H-2018 Waypoint

Gross Margin


>9.7%

$26$24 $23 $22 $20

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 2H-2018 Waypoint

LTM Profit per Square Foot ($)

>67%

$29


Our Financial Goals Remain Unchanged

Target Business ModelRevenue $2.8 – $3.2BGross Margin 9.8 – 10%SG&A 4.8 – 4.5%Non-GAAP Operating Income >5.5%ROIC >12%Cash Conversion Cycle <70 Days


Updated 2019 Observations (Excluding Legacy Computing Contract)

Expect year-over-year revenue growth► Revenue growth of 3-5%► Assumes continued T&I (front-end semi-cap) softness in 1H-19 and ~10% year-over-

year decline

Margins will expand from current levels► Targeting gross margins in the 9.5% - 9.8% exiting 2019

o Reducing cost and expense structureo Returns from new RF and high-speed design center at higher margins

► Managing SG&A expenses

Execute capital allocation strategy► Continue to repurchase shares on total remaining authorization of $202M► Continue quarterly dividend


$584$721

2017 2018 2019Waypoint

74% 74%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2017 2018 2019Waypoint

$36 $36 $34

$25

$27

$29

$31

$33

$35

$37

$39

Q1 - 18 Q2 - 18 Q3 - 18 Q4 - 18 2H-2019…

10.1%9.2% 9.3% 9.5%

-1.0%

1.0%

3.0%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

Q1 - 18 Q2 - 18 Q3 - 18 Q4 - 18 2H-2019 Waypoint

Progress Milestones 2019 (Excluding Legacy Computing Contract)

SG&A ($M)Gross Margin (%)

Higher-Value Market Revenue MixBookings ($M)$900

$34

72%

9.8%

$800 78%

$36

9.5%


Evolution to Date and the Future

Repositioning and Realignment of Benchmark► Implementation of market-sector sales organization to drive growth

► Expansion of engineering and technology capabilities

► Optimization of our network for elevated operational execution

Commitment to Achieving Our Long-Term Business Model► Transforming business to increase exposure to higher-value markets

► Pursuing revenue growth and margin expansion as we extend capabilities to customers

► Strong focus on operational execution and expense management

► Returning value to shareholders through disciplined capital allocation

| 46

Q4 & 2018 Financial Highlights


Fourth Quarter 2018 Financial SummaryFor the Three Months Ended

(In millions, except EPS) Dec. 31, 2018 Sep. 30, 2018 Q/Q Dec. 31, 2017 Y/Y

Net Sales $657 $641 3% $666 (1%)

GAAP Operating Margin 2.3% 1.7% 60 bps 3.3% (100 bps)

GAAP Diluted EPS $0.64 $0.17 282% ($1.54) 142%

Non-GAAP Operating Margin 3.2% 2.9% 30 bps 4.1% (90 bps)

Non-GAAP Diluted EPS $0.41 $0.33 25% $0.49 (16%)

GAAP ROIC 6.2% 7.0% (80 bps) 8.1% (190 bps)

Non-GAAP ROIC 9.2% 9.8% (60 bps) 10.3% (110 bps)

See APPENDIX 1 for a reconciliation of GAAP to non-GAAP Financial Results

Our Guidance for the Fourth Quarter:► Revenue (in millions) $610 – $650► Diluted EPS – non-GAAP $0.32 – $0.40


Higher-Value Markets Dec. 31, 2018 Sep. 30, 2018 Q/Q

Industrials 18% $121 20% $128 (6%)

Aerospace & Defense 16% $105 16% $105 --

Medical 16% $104 15% $96 8%

Test & Instrument. 11% $70 12% $77 (9%)

Total Revenue $400 $406 (2%)

Revenue by Market Sector

(1) In millions

Traditional Markets Dec. 31, 2018 Sep. 30, 2018 Q/Q

Computing 26% $171 23% $146 18%

Telecommunications 13% $86 14% $89 (3%)


Dec. 31, 2017 Y/Y

26% $172 (1%)

11% $77 12%

$249 3%

For the Three Months Ended

Dec. 31, 2017 Y/Y

19% $129 (6%)

15% $95 10%

15% $100 4%

14% $93 (25%)

$417 (4%)

(1) (1) (1)

(1) (1) (1)


GAAP Key Business Trends

Return on Invested Capital (LTM)Operating Margin ($M)


NOPAT Inv. Capital

21.918.0 14.3 11.0

15.3

3.3% 3.0%2.2% 1.7% 2.3%

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

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

33.3 35.7 35.8 37.6 34.0

5.0%5.9% 5.4% 5.9%

5.2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

666 608 661 641 657

9.1% 9.6%8.2% 8.2% 8.4%

1.0%

3.0%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

0

200

400

600

800

1,000

1,200

1,400

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

GAAP ROIC = (GAAP income from operations – GAAP Tax Impact) ÷ (Average Invested Capital for last 5 quarters)

878 850 848 848 829

71 77 70 59 51

8.1% 9.1% 8.2%7.0% 6.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18


Non-GAAP Key Business Trends

Operating Margin ($M)


NOPAT Inv. Capital

Non-GAAP ROIC = (Non-GAAP income from operations – Non-GAAP Tax Impact) ÷[Average Invested Capital for last 5 quarters]

(1) Excludes the impact of customer insolvency.

33.3 35.7 35.8 35.9 34.0

5.0%5.9% 5.4% 5.6% 5.2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18(1) (1)

666 608 661 641 657

9.1% 9.5%8.2% 8.5% 8.4%

1.0%

3.0%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

0

200

400

600

800

1,000

1,200

1,400

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18(1) (1)

27.122.2

18.1 18.5 21.1

4.1% 3.7%2.7% 2.9% 3.2%

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

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18(1) (1)

878 850 848 848 829

91 95 89 83 76

10.3% 11.2% 10.5% 9.8% 9.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

200

400

600

800

1000

1200

1400

1600

1800

Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

Return on Invested Capital (LTM)

(1) (1)

(1)(1) (1) (1)

(1) (1) (1)(1)

(1) (1)

(1) (1)


2018 Financial SummaryFor the Twelve Months Ended

(In millions, except EPS) Dec. 31, 2018 Dec. 31, 2017 ‘17 to ’18 ∆ Y/Y

Net Sales $2,566 $2,454 $112 5%

Non-GAAP Gross Margin $221 $227 ($6) (2%)

Non-GAAP Gross Margin % 8.6% 9.2% (60 bps)

Non-GAAP SG&A $141 $129 $12 10%

Non-GAAP SG&A % 5.5% 5.2% 30 bps

Non-GAAP Operating Income $80 $98 ($18) (19%)

Non-GAAP Operating Margin 3.1% 4.0% (90 bps)

Non-GAAP Diluted EPS $1.45 $1.61 ($0.16) (10%)

Non-GAAP ROIC 9.2% 10.3% (110 bps)


2018 Revenue Results by Market Sector

(1) In millions

For the Twelve Months Ended

Higher-Value Markets Up 2% YoY

Higher-Value Markets Dec. 31, 2018 Dec. 31, 2017 Y/Y

Industrials 19% $493 20% $496 (1%)

Aerospace & Defense 16% $406 16% $392 4%

Medical 15% $394 15% $374 5%

Test & Instrument. 14% $355 14% $346 2%

Total Revenue $1,648 $1,608 2%

Traditional Markets Dec. 31, 2018 Dec. 31, 2017 Y/Y

Computing 23% $581 22% $540 7%

Telecommunications 13% $337 13% $306 10%


(1) (1)

(1) (1)


Cash Flow / Working Capital Highlights

(1) Free cash flow (FCF) defined as net cash provided by operations (GAAP) less capex

(In millions) Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2018 Sep. 30, 2018 Dec. 31, 2017

Cash Flows from (used in) Operations $77 $146 $94 ($1) $56

FCF $10 $91 $80 ($16) $39

Cash $458 $743 $458 $476 $743

International $154 $674 $154 $170 $674

US $304 $69 $304 $306 $69

Inventory $310 $269 $310 $321 $269

Accounts Receivable $468 $437 $468 $456 $437

Contract Assets $140 $146 $140 $156 $146

Accounts Payable $422 $363 $422 $374 $363

For the Three Months EndedFor the Twelve Months Ended

1


Working Capital Update

Ongoing Cash Conversion Cycle Days will Range between 73 and 68 Days

Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18

Accounts Receivable Days 63 62 57 61 59 59 61 64 64

Contract Asset Days 23 24 22 24 20 22 20 22 19

Inventory Days 39 48 45 46 40 50 47 49 46

Deposits 4 4 4 4 3 3 2 4 4

Accounts Payable Days 52 61 55 55 54 60 57 57 63

Cash Conversion Cycle 69 69 65 72 62 68 69 74 62

69 69 65 72 62 68 69 74 62

0

20

40

60

80

100

120

Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18


Capital Allocation Update

Stock repurchase authorizations in 2018► Q1-18: Board approved stock repurchase of up to an additional $250 million of common stock

► Q4-18: Board approved stock repurchase of up to an additional $100 million of common stock

Recurring dividend initiated Q1-18► Announced first quarterly cash dividend of $0.15 per share to shareholders of record as of

March 29, 2018; dividends were paid in April, July, and October 2018; and January 2019

Accelerated Stock

Repurchase (ASR)

Open Market

Repurchase (OMR)

$50 million ASR Completed

Completed $212 million in 2018

$202 million remaining on existing authorizations$162 million OMR (Dec. 31)


First Quarter 2019 Guidance


Guidance

Net Sales (in millions) $570 – $610

Diluted EPS – non-GAAP* $0.29 – $0.37


Sequential Modeling Information (Including Legacy Computing Contract)

Higher-Value Markets Q1-19 Outlook (%)

Industrials Down Low Singles

Aerospace & Defense Flat

Medical Up Low Singles

Test & Instrumentation Down 10%

Traditional Markets Q1-19 Outlook (%)

Computing Down >30%

Telecommunications Down Low Singles

Q1-19Guidance

Operating Margin - non-GAAP* 2.7% – 3.2%

Interest Expense (in millions) $1.9

Effective Tax Rate 20%

Weighted Average Shares (m) 40.7



2020 Modeling Information to Reflect Expiration of Legacy Computing Contract in 2019

Traditional Markets 2020 Outlook

Computing Revenue Down$280 - $320M

2020 Outlook

Gross Margin - non-GAAP* Up 80 to 90 bps


| 59

Appendix


APPENDIX 1 - Reconciliation of GAAP to non-GAAP Financial Results (Amounts in Thousands, Except Per Share Data) – (UNAUDITED)


APPENDIX 2 - Reconciliation of GAAP to non-GAAP Financial Measures(Amounts in Thousands, Except Per Share Data) – (UNAUDITED)


APPENDIX 3 - Reconciliation of Free Cash Flow(Amounts in Thousands, Except Per Share Data) – (UNAUDITED)

Dec 31, 2018 Sep 30, 2018 Dec 31, 2017 Dec 31, 2018 Dec 31, 2017Net Cash provided by Operations 93,980$ (1,111)$ 55,952$ 76,687$ 145,842$

Additions to property, plant and equipment and software (13,799) (14,570) (16,770) (66,732) (54,506) Free Cash Flow 80,181$ (15,681)$ 39,182$ 9,955$ 91,336$

Three Months Ended Year Ended

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