Benchmark Electronics, Inc.

Good day and welcome to the Benchmark Electronics, Inc. fourth quarter 2022 earnings call. All participants will be in a 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 Paul Manske with Benchmark Electronics. Please go ahead.

Thank you, Chad. And thanks to everyone for joining us today at Benchmark's fourth quarter fiscal year 2022 earnings call. Joining me this afternoon are Jeff Bank, CEO and President, and Rupalakaraju, CFO. After the market closed today, we issued an earnings release pertaining to our financial performance for the fourth quarter of 22. And we have prepared a presentation that we will reference on this call. The press release and the presentation are available online under the investor relations section of our website at 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 the appendix in the presentation. Please take a moment to review the forward-looking statements advice on slide two in this 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 due to the ongoing impact of global supply chain constraints, macroeconomic conditions, and COVID. Benchmark undertakes no obligation to update any forward-looking statements. For today's call, Jeff will be covering a summary of our fourth quarter and fiscal year results. Rup will then discuss our detailed financial results in our first quarter and fiscal year 2023 guidance. Jeff will then return to provide more insight on sector demand trends, business wins, and closing commentary. If you will, please turn to slide three. I will turn the call over to our CEO, Jeff Bank.

Thank you, Paul. Good afternoon, and thanks to everyone for joining our call today. Hopefully by now, you have seen our press release and results for the fourth quarter 2022. which again demonstrated our continued execution of our growth strategy. Referencing slide three, revenue in the fourth quarter of $751 million was up 19% year over year. Our GAAP and non-GAAP gross margin was 9.6%, while our GAAP operating margin was 3.6% or 4.3% on a non-GAAP basis. Supply chain premiums were approximately $10 million lower than our guidance in the quarter. as we continue to see these decrease. Excluding the effective supply chain premiums, we delivered non-GAAP gross margin of 10.2% and non-GAAP operating margin of 4.6%. When comparing to most of our peers who exclude stock-based compensation from their non-GAAP results, our non-GAAP margin would be 5.2% given the approximately 70 basis points of stock-based compensation included in our results. Finally, we delivered both GAAP and non-GAAP earnings of $0.60 per share, which was another record quarter of earnings for the company. In the fourth quarter, although we saw some greater than expected softening in the SEMICAP sector late in the quarter, we still managed to grow SEMICAP well into the double digits year on year. Coupled with the continued strength in EMS and the diversity of our model, we delivered quarterly earnings at the midpoint of our guidance range. Turning to the full year on slide four. In 2022, we grew revenue 28% and delivered non-GAAP earnings of $2.09. This represented a record earnings performance for the company. GAAP and non-GAAP gross margins were 8.8%, while GAAP operating margins were 3.1%. On a non-GAAP basis, our operating margins of 3.6% were up 60 basis points year on year. Excluding the effects of supply chain premiums, revenue grew 20% year over year to approximately $2.6 billion, with double-digit growth in five of our six sectors. Non-GAAP gross margin expanded to 9.7%, and non-GAAP operating margin of 4% was up 80 basis points year over year. I would like to congratulate the entire benchmark team for their continued execution as we deliver on our strategic objectives. As many of you are aware, we communicated specific financial targets back in 2020 that indicated what we felt was possible by the end of 2022. These were established in the middle of the global pandemic and before the full effect of the related supply chain disruptions were known. Despite these challenges, We never lost focus on our execution and ultimately met or exceeded each of these targets across every metric. However, we recognize this is a journey, and while 2022's results represented a key waypoint, we have much room for further improvement. Now, let me pass it over to Rup to share a few more details.