Celestica, Inc.

Thank you for standing by and welcome to the Celestica fourth quarter 2020 earnings call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. Thank you. I'd now like to hand the conference over to Craig Oberg, Vice President, Investor Relations. Mr. Oberg, please go ahead.

Good morning, and thank you for joining us on Seleska's fourth quarter 2020 earnings conference call. On the call today are Rob Mayonis, President and Chief Executive Officer, and Mandeep Chawla, Chief Financial Officer. As a reminder, during this call, we will make forward-looking statements within the meanings of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Such forward-looking statements are based on management's current expectations, forecasts, and assumptions, which are subject to risks uncertainties, and other factors that could cause actual outcomes and results to differ materially from conclusions, forecasts, or projections expressed in such statements. For identification and discussion of such factors and assumptions as well as further information concerning forward-looking statements, please refer to today's press release including the cautionary note regarding forward-looking statements therein, our most recent annual report on Form 20F, and our other public filings which can be accessed at SEC.gov, and CDAR.com. We assume no obligation to update any forward-looking statement except as required by law. In addition, during this call, we will refer to various non-IFRS measures, including operating earnings, operating margin, adjusted gross margin, adjusted return on invested capital or adjusted ROIC, free cash flow, gross debt to non-IFRS trailing 12-month adjusted EBITDA leverage ratio, adjusted net earnings, adjusted EPS, adjusted SG&A, and adjusted effective tax rate. Listeners should be cautioned that references to any of the foregoing measures during this call denote non-IFRS measures, whether or not specifically designated as such. These non-IFRS measures do not have any standardized meanings prescribed by IFRS and may not be comparable to similar measures presented by other public companies that use IFRS or who report under U.S. GAAP and use non-GAAP measures to describe similar operating metrics. We refer you to today's press release and our Q4 2020 earnings presentation, which are available at Seleska.com under the investor relations tab for more information about these and certain other non-IFRS measures, including a reconciliation of historical non-IFRS measures to our most directly comparable IFRS measures from our financial statements. Unless otherwise specified, all references to dollars on this call are to U.S. dollars, and per share information is based on diluted shares outstanding. Let me now turn the call over to Rob.

Thank you, Craig. Good morning, everyone, and thank you for joining us on today's conference call. Lustica delivered a solid fourth quarter to end a year of unprecedented challenges. Fourth quarter revenue was within our guidance range, while operating margin and adjusted EPS were above the midpoint of our ranges. Within our ATS segment, we achieved strong revenue growth in health tech and capital equipment and reported sequential improvement in segment margins for the third consecutive quarter, as well as improvement in segment margin on a year-over-year basis. Despite these successes, demand weakness and commercial aerospace offset the strong growth in other businesses. Within CCS, we successfully concluded our Cisco disengagement in the fourth quarter. Q4 revenue decreased year-over-year and sequentially, with Cisco revenue declines more than offsetting growth in other areas. Despite the revenue decline, the segment posted expanded margin on a year-over-year basis for the fourth consecutive quarter and operated above our 2% to 3% target range. Our JDM business continues to experience impressive growth. JDM revenues were $211 million in the fourth quarter, up 53% year-over-year. JDM represented approximately 15% of our total company revenues in Q4. Many of you attended our JDM roundtable in December, where we discussed key elements of the business. For example, we noted that we have more than 500 JDM design engineers across the globe, working on current and next-generation hardware platform solutions. We have over 280 patents safeguarding our hardware technical advantage, and we drive a robust IP management process. Since the inception of JDM, we have launched over 150 programs and shipped more than 2.5 million units to our customers worldwide. The term joint design and manufacturing, or JDM, describes this offering as it began over a decade ago as a co-development model. However, we feel the term does not fully reflect the extensive evolution of our business over the last 10 years. It does not describe the breadth and depth of our current offering and roadmaps, the scope of our capabilities across the product lifecycle, nor the leading-edge solutions which have been fueled by more than 10 years of significant R&D investment. Therefore, moving forward, we will be referring to JDM as hardware platform solutions. or HPS. Said more simply, JDM is an engagement model and capability that we offer within our broader hardware platform solutions offering. We believe that HPS is a highly strategic offering within Celestica's portfolio, currently enabled by a comprehensive slate of more than 40 hardware platforms. Moreover, our HPS offerings support customers across the product lifecycle, and generates accretive margins, sharing many of the highly valued attributes of our ATS segment. Additionally, HPS has a diverse patent portfolio, comprehensive product roadmaps, and a deep ecosystem of partnerships with industry-leading companies. HPS revenue and ATS segment revenue together represent what we call lifecycle solutions. In 2020, lifecycle solutions represented more than half of our total revenue, and had an average growth rate of 8% over the last three years. We expect the revenue growth of lifecycle solutions to continue in the coming years and for it to represent a larger portion of our total revenues. This is in line with our diversification strategy and provides higher value added solutions to enable our customers. I will provide some additional color on our end markets and outlook shortly. But first, I will turn the call over to Mandip to give you some details on the fourth quarter and our first quarter 21 guidance.