Benchmark Electronics, Inc.

Good afternoon and welcome to the Benchmark Electronics Third 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 third quarter 2020 earnings call. Joining me this afternoon are Jeff Banks, CEO and President, and Roop Lakharaji, CFO. After the market closed today, we issued an earnings release highlighting our financial performance for the third 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 gap to non-gap 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 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 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 a summary of our third quarter. Rup will then discuss our detailed third quarter results, including a cash and balance sheet summary, and fourth quarter guidance. Jeff will wrap up with an outlook by market sector, an update on our strategic initiatives, and a discussion on our midterm financial model 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 to everyone for joining our call today. We hope you are all staying safe and healthy during these unprecedented times. In Q3, we delivered revenue of $526 million, which was up 7% sequentially from Q2, supported by strong demand in our defense, SEMICAP, and telco sectors, and improved manufacturing productivity. With improving operational efficiency, non-GAAP gross margins rebounded 170 basis points, to 8.7% for the quarter. Improved profits and focused expense management resulted in non-GAAP earnings of 32 cents per share, which includes 1.3 million, or 4 cents per share, of COVID-related costs. We believe COVID costs are a part of the new operating normal, and while we believe they will decline to some degree from current levels, they will likely not completely go away. After a challenging couple of quarters, I'm pleased to report that our manufacturing and engineering services operations have essentially returned to pre-COVID productivity levels, which has supported our improved results for Q3. This has not been without an incredible amount of work from our COVID task force and our entire employee population to maintain stringent protocols to ensure we keep our workplace safe and healthy, which remains a top priority. Our cash conversion cycle for the quarter improved to 81 days from 84 days in Q2. I also want to thank our supply chain team, who's done an incredible job of managing through many global logistical challenges this year to continue production for our operations in support of our customers. All in all, a solid quarter for Benchmark, and my continued thanks to the entire team for their hard work in support of our customers. Please turn to slide four. As I've mentioned previously, our go-to-market team continues to deliver exciting opportunities aligned to our complex and focused services and solutions that utilize the full breadth of the one benchmark capabilities. And we had another strong quarter of bookings in Q3 where we awarded business that should represent over 200 million of future engineering and manufacturing revenue. In the medical sector, we were awarded a new program for a lab-free rapid COVID-19 testing device from DNA Nudge that has begun production in our Netherlands facility. We are excited to partner with DNA Nudge to provide DFX support and high reliability manufacturing for what has turned out to be a very swift product ramp. We also had design and manufacturing process wins with two other companies for a pulmonary treatment device and an optical diagnostic product for renal applications. In the defense vertical, we were awarded new programs for secure communication radio modules that incorporate our design solutions and manufacturing services for electronics that will be deployed in military aircraft. In industrials, we were awarded the full system box build for a LiDAR application and we were awarded manufacturing for a new generation of oscilloscopes. In computing, we were awarded a new prototype for a hyperscale computing customer and a new outsourcing award from an existing customer supporting network control and monitoring electronics. Our new business pipeline continues to be strong across our targeted sectors and subsectors, and we remain very encouraged about the prospect for continued wins. where the outsourcing environment for both engineering and manufacturing projects remains favorable. Now I'll turn the call over to Ru to discuss the third quarter results. Ru?