Benchmark Electronics, Inc.

Fourth quarter 2023 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 Paul Manske, Investor Relations and Corporate Development of Benchmark. Please go ahead.

Thank you, Andrea, and thanks to everyone for joining us today for Benchmark's fourth quarter fiscal year 2023 earnings call. Joining me this afternoon are Jeff Bank, CEO and President, and Rupal Akarajar, CFO. After the market closed today, we issued an earnings release pertaining to our financial performance for the fourth quarter of 2023. and we have prepared a presentation that we will reference on this call. Both 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 in the appendix to the presentation. Please take a moment to review the forward-looking statements disclosure on slide two in the presentation. During our call, we will discuss forward-looking information. As a reminder, any of today's remarks, which 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. Pinchmark undertakes no obligation to update any forward-looking statements. For today's call, Jeff will begin by providing a summary of our fourth quarter. Rup will then discuss our detailed financial results and our first quarter guidance. Jeff will then return to provide more insight into demand trends by sector, business wins, and then closing remarks. If you will please turn to slide three, I'll turn the call over to our CEO, Jeff Banks.

Thank you, Paul. Good afternoon, and thanks to everyone for joining our call today. The fourth quarter was another period of solid execution for the company. Despite some revenue softening, which impacted our top line, we met or exceeded all other objectives for the quarter. This directly reflects the company's focus on operational execution. Let me step through a few highlights in the quarter. Total revenue of $691 million was down high single digits year over year and mid-single digits sequentially. I will point out that supply chain premiums, or SCP, have normalized, ending the fourth quarter at slightly below $8 million, versus 46 million in the same period last year. Excluding SEP, fourth quarter revenue was down low single digits versus last year. Despite this challenge, our non-GAAP gross margin exceeded 10 percent, growing both sequentially and year-over-year. Coupled with a 9 percent year-on-year reduction in non-GAAP operating expense in the quarter, we drove operating margin to greater than 5 percent. As a reminder, This margin includes approximately 50 basis points of stock compensation. I want to congratulate the entire team for delivering such a strong set of results, which allowed us to report 58 cents in non-GAAP earnings per share, above the midpoint of our guidance. Finally, as we've highlighted over the last few quarters, we've implemented a number of actions to drive free cash flow. I'm pleased to report that we generated $126 million in Q4 and $97 million for the full year, well ahead of our objective of $70 to $80 million. This was enabled in a large part by our reduction in inventory. Considering all the end market obstacles facing us and others, I'm proud of the team's execution in the quarter and throughout 2023. Now, let me pass it over to Rup to share more details on the December quarter and our fiscal year 2023, and guidance for Q1 2024.