Benchmark Electronics, Inc.

Good afternoon and welcome to the Benchmark Electronics Incorporated second quarter 2019 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch tone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Lisa Weeks, Vice President of Strategy and IR. Please go ahead.

Thank you, Operator, and thanks everyone for joining us today for Benchmark's second quarter 2019 earnings call. With me this afternoon, I have Jeff Banks, CEO and President, and Root Wakaraju, CFO. Jeff will provide introductory comments and Root will provide a detailed review of our second quarter financial results and third quarter outlook. We will conclude our call with a Q&A session. After the market closed today, we issued an earnings release highlighting our financial performance for the second quarter of 2019, and we have prepared a presentation that will reference on this call. The press release and presentation are available online under the investor relations section of our website at www.finch.com. This call is being webcast live and a replay will be available online following the call. Please take a moment to review the forward-looking statements advice on slide two in the presentation. During our call, we will discuss forward-looking information. As a reminder, any of today's remarks that are not statements of historical fact are forward-looking statements which involve risks and uncertainties described in our press releases and SEC filings. Actual results may differ materially from these statements, and Benchmark undertakes no obligation to update any forward-looking statements. The company has provided a reconciliation of our GAAP to non-GAAP measures in the earnings release, as well as in the appendix of the presentation. I will now turn the call over to our CEO, Jeff Zane.

Thanks, Lisa, and welcome to everyone joining us for this afternoon's call. I've been on the job for four months now, and I've learned a lot about our strengths, our unique capabilities, and where we have room to improve. And importantly, I've had the opportunity to hear from many of our customers what their needs are going forward and how we can help them accelerate their business and in turn grow ours. I'm energized by the opportunities in front of us, and we are in the process of transforming our organization to ensure we capitalize on this opportunity. During the call today, I will first provide a brief overview of our second quarter 2019 results and introduce the new executives I've added to our team. Rup will then take over and talk through the financial update, and I will close with a review of the key strategic initiatives we'll be driving in the coming year. Please turn to slide four. In the quarter ending June 30, 2019, we delivered revenue of $602 million. which was beyond the high end of our guidance, and we achieved 36 cents of non-GAAP EPS, which was at the high end of our guidance range. Revenue was higher than our expectations, driven by year-over-year increases in the higher value, A&D, and medical markets, along with higher-than-expected revenues from the legacy computing contract. Our non-GAAP gross margins improved 10 basis points sequentially to 8.9%. on a higher value market in May, despite continued softness in the semi-cap market sector, which was down 41% from the second quarter of 2018. More importantly, non-GAAP gross margins were over 10% when you exclude the legacy computing contract revenue, which reflects the potential leverage in our model with an improving portfolio. Please turn to slide five. I've been very focused on building our leadership team, and I'm excited about the recent additions that we've announced who will be instrumental in helping us execute our strategy. First, we've added Rob Crawford as the company's first chief revenue officer. In this role, Rob will direct our global go-to-market strategy with explicit attention on sector strategies, portfolio optimization, marketing execution, and revenue realizations. to ensure we achieve our growth objectives. Rob brings over 25 years of combined EMS and OEM experience from his prior leadership roles at other technology companies, making him a perfect fit for this new role at Benchmark. Furthermore, his engineering background enables him to not only understand our unique capabilities, but be able to articulate to customers the differentiation we bring. I am confident that Rob will do a great job spearheading our in-flight go-to-market transformation. Second, we have added Rhonda Turner as the Chief Human Resources Officer to replace the vacancy left by the previous HR leader who departed before I joined. Rhonda will oversee all functions of our HR team, including talent acquisition, employee engagement, organizational design, comp and benefits, and lead the deployment of our new HR shared services model. She comes to us from the University Technical Institute, where she was SVP of HR with the past leadership positions at ConocoPhillips and Circle K. In our service business, people are critical to the company's success. Rhonda has demonstrated her ability to globally align people and business strategies and I'm energized by Rhonda's ideas on how to support our talented and diverse workforce. Rhonda will be a change agent in our organization and a key contributor to our centralization, standardization, and scalability initiative. Now, if you please turn to slide six, I will turn the call over to Ru to discuss our financial results for the quarter.