Benchmark Electronics, Inc.

Good afternoon and welcome to the benchmark first quarter 2020 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 telephone keypad. 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 Investor Relations. Please go ahead.

Thank you, Operator, and thanks, everyone, for joining us today for Benchmark's first quarter 2020 earnings call. Joining me this afternoon are Jeff Banks, CEO and President, and Roop Lakharaju, CFO. After the market closed today, we issued an earnings release highlighting our financial performance for the first quarter, and we've prepared a presentation that we will reference on this call. The press release and presentation are available online under the investor relations section of our website at www.bench.com. This call is being webcast live, and a replay will be available online following the call. 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. Please take a moment to review the forward-looking statements advice on slide two in the presentation. During this 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 as described in our press releases and SEC filings. Actual results may differ materially from these statements, most notably from the ongoing impact of the COVID-19 pandemic, and Benchmark undertakes no obligation to update any forward-looking statements. For today's call, Jeff will begin by covering the framework of our COVID-19 emergency response protocol and providing a current status of our global operations. Rup will then discuss our first quarter results, including a cash and balance sheet summary. Jeff will wrap up with a rundown of demand outlook by market sector and our near-term guideposts before we conclude the call with Q&A. If you will please turn to slide three in the presentation, I will turn the call over to our CEO, Jeff Bank.

Thank you, Lisa. Good afternoon, and thanks for joining us. I'd like to start off the call by offering our heartfelt condolences to all who have been affected by the COVID-19 crisis. I would also like to recognize the courageous healthcare workers and first responders who are taking care of those impacted by the COVID-19 virus. For the past three months, we've been working very hard to maintain operations against the global spread of the pandemic with two priorities in mind. First is the health and safety of our colleagues and their families. The second priority is to sustain the output of our operations so that we can continue to serve our customers during this critical time. Since the early outbreak and direct impacts to our Suzhou, China operations, the senior leadership team have met daily and created a task force to centralize employee and operational safety protocols and to establish a global communications cadence. We receive a daily report on employee health and the status of our global manufacturing and engineering operations. We also established a critical work stream to deal with the ever-changing government requirements and regulations, and to maintain alignment between the local authorities, our operations, and our customers. I want to give tremendous kudos to our team for all they have accomplished. This is a 24-hour-a-day, seven-day-a-week, day-in and day-out effort to stay aligned, productive, and coordinated. Our teams have approached this challenge with incredible resolve and a sense of responsibility to our employees, customers, shareholders, and local communities. Please turn to slide four. As the global COVID pandemic has evolved, Benchmark continues to follow guidance from the World Health Organization and the Center for Disease Control and Prevention, as well as working with national, state, and local governments to determine the best operating status for each of our global locations. While some employees are being asked to work from home, this is not an option for many directly involved in the manufacturing or design of critical products. For our employees working in our facilities, we've added new protocols for extensive and frequent disinfecting and cleaning, spacing of personnel, and more. For those employees who could work remotely, we have invested in tools and equipment to allow them to continue to be productive. We are pleased with the results and creativity these teams have shown as they have found new ways to collaborate and to communicate with each other and our customers. As the coronavirus began to make its way around the world, we saw challenges imposed by governments from various forms of stay home, shelter in place, and lockdown orders and some imposed by our own health and human resources teams to ensure we are maintaining state facilities. Benchmark provides critical infrastructure products and essential services in each of our locations. However, government policies and implementations have still impacted operations. I'll start with our Suzhou site, which was impacted after the Chinese New Year. We were given early approval to reestablish operations to support critical medical products and were ramped back to full capacity by mid-March. Our China plant continues to operate at full capacity today. In mid-March, there were new decrees that caused significant disruptions in our Penang, Malaysia operation, which includes our largest precision machining facility. Unfortunately, local restrictions remain in force and we were only operating at 30% of capacity to start the quarter. This is now changing where we can move to full capacity starting this week. We've worked hard to minimize the impact by staggering shifts, extending coverage, and modifying our workflow, but we have not been operating at optimum levels. Our European operations in the Netherlands and Romania have had some limited interruptions but continue to operate near full capacity. In the last few weeks of March and in early April, we saw all states in the U.S. implement some form of shelter-in-place orders. We were hit particularly hard in our California facilities where we have five operations, two in the Bay Area and three in Southern California, which are not yet back at full capacity. As we sit here today, we're still working through a major disruption in our two Tijuana, Mexico operations. which were shut down practically overnight by the Baja State, despite previously passing an inspection and given the authorization to operate by the central Mexican government. These two locations currently remain closed with zero manufacturing output. Our Guadalajara facility is also not operating at full capacity due to government restrictions. This has been and remains a highly dynamic environment and through the collective efforts of our incredible employees, we are managing priorities to meet and fulfill as much demand as possible. Our estimate today is that we are operating approximately at 75% to 80% of productivity. We are hopeful the shelter-in-place orders do as intended and the infection curve peaks and starts to decline so that normal operations can resume in all locations. Please turn to slide five. We've been recognized around the world as an essential business supporting critical infrastructure and we're proud of the integral role we're playing in the frontline fight. Benchmark began its journey as a medical device manufacturer more than 40 years ago and has maintained partnerships with some of the largest medical technology companies in the world. We are working with medical customers and governments to get life-saving equipment where it is needed most by providing critical design services and expediting manufacturing capacity, even doubling or quadrupling production volumes for some customers. Demand has increased for diagnostic imaging products, including mobile x-ray and MRI products, and handheld ultrasonic devices. We are supporting multiple ventilator projects with new and existing customers, which are in high demand to support those who need the most critical support in hospitals around the world. On the diagnostic front, we are supporting point-of-care devices, including a rapid one-hour COVID-19 virus tester and a rapid sepsis testing device. I want to say a heartfelt thank you again to our extraordinary team for their flexibility in supporting our customers when it matters most, not just in medical, but across our portfolio where we are supporting critical infrastructure. Next, I'll turn the call over to Rup to discuss the first quarter results, and following his commentary, I will share further insights regarding our business and view of future demand by sector. Rup, over to you.