8-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):    February 8, 2017

BENCHMARK ELECTRONICS, INC.

(Exact name of registrant as specified in its charter)

Texas (State or other jurisdiction of incorporation) 1-10560 (Commission File Number) 74-2211011 (I.R.S. Employer Identification No.)

3000 Technology Drive, Angleton, Texas77515 

(Address of principal executive offices)  (Zip code)

Registrant’s telephone number, including area code:  (979) 849-6550

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

     [  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     [  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     [  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     [  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.   Results of Operations and Financial Condition.

On February 8, 2017, we issued a press release announcing our results of operations for the quarter and fiscal year ended December 31, 2016 and held an earnings conference call. Copies of the press release and presentation slides used in connection with the conference call are attached as Exhibit 99.1 and Exhibit 99.2 to this report and are hereby incorporated herein by reference.

Item 9.01.   Financial Statements and Exhibits.

                (d)  Exhibits 

Exhibit 99.1     Press release

Exhibit 99.2     Presentation slides

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BENCHMARK ELECTRONICS, INC.

Dated: February 8, 2017	By: /s/ Donald F. Adam
	Donald F. Adam
	Chief Financial Officer

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EXHIBIT INDEX
Exhibit Number	Description
99.1	Press release
99.2	Presentation slides

EX-99.1

 

Exhibit 99.1

FOR IMMEDIATE RELEASE

BENCHMARK ELECTRONICS REPORTS FOURTH QUARTER AND FY 2016 RESULTS

·Quarterly revenue of $608 million

·Quarterly operating margin of 3.9% (4.8% non-GAAP)

·Quarterly EPS of $0.37 ($0.45 non-GAAP)

·Improved cash conversion cycle to 74 days

·Annual operating cash flow of $273 million

·Repurchased $42 million of common stock in 2016

ANGLETON, TX, February 8, 2017 – Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the fourth quarter and year ended December 31, 2016.

	Three Months Ended
	Dec 31,	Sep 30,	Dec 31,
In millions, except EPS	2016	2016	2015
Net sales	$608	$574	$626
Net income	$19	$22	$39
Net income – non-GAAP	$22	$18	$24
Diluted EPS	$0.37	$0.44	$0.77
Diluted EPS – non-GAAP	$0.45	$0.36	$0.48
Operating margin	3.9%	3.1%	3.5%
Operating margin – non-GAAP	4.8%	4.3%	4.8%

	Twelve Months Ended
	Dec 31,	Dec 31,
In millions, except EPS	2016	2015
Net sales	$2,310	$2,541
Net income	$64	$95
Net income – non-GAAP	$72	$88
Diluted EPS	$1.29	$1.83
Diluted EPS – non-GAAP	$1.45	$1.68
Operating margin (%)	3.3%	3.7%
Operating margin – non-GAAP (%)	4.3%	4.4%

A reconciliation of GAAP and non-GAAP results is included below.

“I am pleased by the Company’s performance in the fourth quarter, which met or exceeded each of our commitments.  Revenue and margins were at the top end of our guidance, and non-GAAP EPS of $0.45 exceeded by two cents.  We generated operating cash flow of $273 million for the year and ended 2016 with cash conversion days of 74, one day lower than our target and

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a twenty-day improvement from the year ago period,” said Paul Tufano, Benchmark’s CEO and President.

“During 2017, we will be realigning and invigorating the organization with three priorities critical to our success”, Tufano added.  “First, the optimization of our global network coupled with a relentless focus on execution excellence.  Within our global teams, we are driving greater ownership and accountability and a heightened sense of urgency.  Second, the investment in a market segment organization tasked with driving appropriate customer acquisition, revenue and margin growth.  Third, the expansion of our engineering capabilities to provide our customers with the design services and technology building blocks that will allow them to go to market faster and more economically.”

Tufano concluded, “I remain excited by our opportunities going forward and the enthusiasm and support of our customers and employees.  Looking ahead, our objective is to meet our commitments to customers, shareholders and employees while we reposition Benchmark for long-term growth.”

Fourth Quarter 2016 Financial Highlights

·Operating margin was 3.9% (non-GAAP 4.8%).

·Cash flows from operating activities were $44 million during the quarter and $273 million for the year.

·Cash conversion cycle improved 6 days from 80 at September 30, 2016 to 74 days at December 31, 2016.

·Cash was $681 million at December 31, of which $626 million was held outside the U.S.

Cash Conversion Cycle

	Dec 31,	Sep 30,	Dec 31,
	2016	2016	2015
Accounts receivable days	65	65	69
Inventory days	62	68	65
Accounts payable days	(53)	(53)	(40)
	74	80	94

“We exceeded our 75-day cash conversion cycle target and exited the year at 74 days,” said Don Adam, CFO.  “For the fourth quarter, we generated$44 million of cash flow from operations, bringing our full year total to $273 million.  We are targeting a cash conversion cycle range of 68-73 days and annual operating cash flows in the range of $125 - $150 million in 2017.  For the full year, we purchased $42 million of our common shares and have $93 million remaining in our current share repurchase program.”

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Fourth Quarter 2016 Industry Sector Update

Revenue by industry sector (dollars in millions) was as follows.

			Dec 31,				Sep 30,				Dec 31,
	Higher-Value Markets		2016				2016				2015
Industrials		$	230	37	%	$	217	38	%	$	223	35	%
Medical			86	14			86	15			91	15
Test &  Instrumentation			65	11			66	11			52	8
		$	381	62	%	$	369	64	%	$	366	58	%
			Dec 31,				Sep 30,				Dec 31,
	Traditional Markets		2016				2016				2015
Computing		$	120	20	%	$	107	19	%	$	155	25	%
Telecommunications			107	18			98	17			105	17
		$	227	38	%	$	205	36	%	$	260	42	%
	Total	$	608	100	%	$	574	100	%	$	626	100	%

Fourth quarter revenues from higher-value markets were in line with expectations.  Test & Instrumentation revenues from semi-capital equipment customers remained strong, and new Industrial programs ramped as expected.  Medical revenues were slightly lower than anticipated due to regulatory delays.  Traditional revenues in Computing and Telecommunications were up on stronger computing demand and the completion of Telecommunications qualifications.

Fourth Quarter 2016 Bookings Update

·New program bookings of $115 to $140 million.

·12 engineering awards supporting early engagement opportunities.

·19 manufacturing wins across all market sectors.

The Company projects that new program bookings for the fourth quarter will result in annualized revenue of $115 to $140 million when fully launched in the next 12-18 months.  The new program bookings align with Benchmark’s strategic focus on higher-value markets.

First Quarter 2017 Outlook

·Revenue between $530-$550 million.

·Diluted GAAP earnings per share between $0.19-$0.23.

·Diluted non-GAAP earnings per share between $0.24-$0.28 (excluding restructuring charges and amortization of intangibles expected to approximate $0.05 per share).  The income tax impact of the non-GAAP adjustments using the applicable effective tax rates is $0.02 per share.

Fourth Quarter 2016 Results Conference Call Details

A conference call hosted by Benchmark management will be held today at 4:30 p.m. Eastern Time to discuss the Company’s financial results and outlook.  This call will be broadcast via the internet and may be accessed by logging on to the Company’s website at www.bench.com.

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About Benchmark Electronics, Inc.

Benchmark provides worldwide integrated electronics manufacturing services (EMS), engineering and design services, and precision machine services to original equipment manufacturers of industrial equipment (including equipment for the aerospace and defense industries), telecommunication equipment, computers and related products for business enterprises, medical devices, and test and instrumentation products.  Benchmark’s global operations include facilities in seven countries, and its common shares trade on the New York Stock Exchange under the symbol BHE.

For More Information, Please Contact:

Lisa K. Weeks, VP of Strategy & Investor Relations

979-331-1361 or lisa.weeks@bench.com

Non-GAAP Financial Measures

This press release includes financial measures that exclude certain items and therefore do not follow U.S. generally accepted accounting principles (GAAP).  A detailed reconciliation between the GAAP results and results excluding special items (non-GAAP) is included at the end of this press release.  Management discloses non-GAAP information to provide investors with additional information to analyze the Company’s performance and underlying trends.  Management uses non-GAAP measures that exclude certain items in order to better assess operating performance and help investors compare results with our previous guidance.  Benchmark’s non-GAAP information is not necessarily comparable to the non-GAAP information used by other companies.  Non-GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as a measure of the Company’s profitability or liquidity. Readers should consider the types of events and transactions for which adjustments have been made.

Forward-Looking Statements

This press release contains certain forward-looking statements within the scope of the Securities Act of 1933 and the Securities Exchange Act of 1934.  The words “expect,” “estimate,” “plan,” “anticipate,” “project,” “predict,” “goals,” “targeting” and similar terms, and the negatives thereof, often identify forward-looking statements, which are not limited to historical facts.  The Company’s forward-looking statements include, among other things, projections relating to expanding or realigning contractual terms, optimizing execution, realigning its footprint, maximizing operational performance, its cash conversion cycle, operating cash flows, the future value of bookings and first quarter 2017 revenues and diluted earnings per share.  Although Benchmark believes these statements are based upon reasonable assumptions, they involve risks and uncertainties relating to our operations, markets and business environment generally.  If one or more of these risks or uncertainties materializes or underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.

All forward-looking statements included in this release are based upon information available to Benchmark as of the date hereof, and the Company assumes no obligation to update them.  Readers are advised to consult further disclosures on related subjects, particularly in Item 1A,

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“Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, in its other filings with the Securities and Exchange Commission and in its press releases.

###

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Benchmark Electronics, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Results
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
			Three Months Ended						Year Ended
			Dec 31,		Sep 30,		Dec 31,		December 31,
			2016		2016		2015		2016		2015
Income from operations (GAAP)		$	23,548	$	18,082	$	21,905	$	75,638	$	92,969
Restructuring charges and other costs			2,663		3,485		6,308		12,539		13,861
Amortization of intangible assets(1)			2,893		3,170		1,923		11,838		4,962
Non-GAAP income from operations		$	29,104	$	24,737	$	30,136	$	100,015	$	111,792
Net income (GAAP)		$	18,568	$	21,742	$	39,421	$	64,047	$	95,401
Restructuring charges and other costs			2,663		3,485		6,308		12,539		13,861
Amortization of intangible assets(1)			2,893		3,170		1,923		11,838		4,962
Income tax adjustments(2)			(1,781)		(2,207)		(2,234)		(7,695)		(5,495)
Discrete tax benefits			-		(8,270)		(21,174)		(8,270)		(21,174)
Non-GAAP net income		$	22,343	$	17,920	$	24,244	$	72,459	$	87,555
Earnings per share: (GAAP)
	Basic	$	0.38	$	0.44	$	0.78	$	1.30	$	1.85
	Diluted	$	0.37	$	0.44	$	0.77	$	1.29	$	1.83
Earnings per share: (Non-GAAP)
	Basic	$	0.46	$	0.37	$	0.48	$	1.47	$	1.70
	Diluted	$	0.45	$	0.36	$	0.48	$	1.45	$	1.68
Weighted-average number of shares used in
calculating earnings per share:
	Basic		49,063		48,965		50,482		49,298		51,573
	Diluted		49,544		49,414		50,914		49,825		52,088

⁽¹⁾Beginning with the third quarter of 2016, our non-GAAP income and earnings per share exclude the impact of the amortization of intangible assets. The non-GAAP earnings per share for prior periods presented above exclude the impact of the amortization of intangible assets.

⁽²⁾This amount represents the tax impact of the non-GAAP adjustments using the applicable effective tax rates.

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Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
			Three Months Ended				Year Ended
			December 31,				December 31,
			2016		2015		2016		2015
Sales		$	607,507	$	625,719	$	2,310,415	$	2,540,873
Cost of sales			550,037		568,810		2,096,952		2,321,619
	Gross profit		57,470		56,909		213,463		219,254
Selling, general and administrative expenses			28,366		26,773		113,448		107,462
Amortization of intangible assets			2,893		1,923		11,838		4,962
Restructuring charges and other costs			2,663		6,308		12,539		13,861
	Income from operations		23,548		21,905		75,638		92,969
Interest expense			(2,369)		(1,569)		(9,304)		(2,996)
Interest income			966		236		2,136		1,207
Other income (expense), net			253		441		(282)		(1,141)
	Income before income taxes		22,398		21,013		68,188		90,039
Income tax expense (benefit)			3,830		(18,408)		4,141		(5,362)
	Net income	$	18,568	$	39,421	$	64,047	$	95,401
Earnings per share:
	Basic	$	0.38	$	0.78	$	1.30	$	1.85
	Diluted	$	0.37	$	0.77	$	1.29	$	1.83
Weighted-average number of shares used in calculating
earnings per share:
	Basic		49,063		50,482		49,298		51,573
	Diluted		49,544		50,914		49,825		52,088

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Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(UNAUDITED)
(in thousands)
					December 31,		December 31,
					2016		2015
Assets
	Current assets:
		Cash and cash equivalents		$	681,433	$	465,995
		Accounts receivable, net			440,692		479,140
		Inventories			381,334		411,986
		Other current assets			28,203		31,507
			Total current assets		1,531,662		1,388,628
	Property, plant and equipment, net				166,148		178,170
	Goodwill and other, net				300,858		327,080
			Total assets	$	1,998,668	$	1,893,878
Liabilities and Shareholders’ Equity
	Current liabilities:
		Current installments of long-term debt and capital lease obligations		$	12,396	$	12,284
		Accounts payable			326,249		251,163
		Accrued liabilities			73,736		69,647
			Total current liabilities		412,381		333,094
	Long-term debt and capital lease obligations, less current installments				211,252		222,909
	Other long-term liabilities				9,570		15,971
	Shareholders’ equity				1,365,465		1,321,904
			Total liabilities and shareholders’ equity	$	1,998,668	$	1,893,878

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Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(in thousands)
(UNAUDITED)
				Year Ended
				December 31,
				2016		2015
Cash flows from operating activities:
	Net income		$	64,047	$	95,401
	Depreciation and amortization			55,139		49,672
	Stock-based compensation expense			5,322		7,709
	Accounts receivable, net			37,573		52,847
	Inventories			27,749		3,974
	Accounts payable			76,039		(41,388)
	Other changes in working capital and other			6,651		(21,411)
		Net cash provided by operations		272,520		146,804
Cash flows from investing activities:
	Additions to property, plant and equipment and software			(32,334)		(38,062)
	Business acquisition, net of cash acquired			10,750		(229,582)
	Other investing activities, net			339		843
		Net cash used in investing activities		(21,245)		(266,801)
Cash flows from financing activities:
	Share repurchases			(41,929)		(68,365)
	Net debt activity			(12,301)		229,324
	Other financing activities, net			19,488		(1,322)
		Net cash provided by (used in) financing activities		(34,742)		159,637
Effect of exchange rate changes				(1,095)		(1,021)
Net increase in cash and cash equivalents				215,438		38,619
	Cash and cash equivalents at beginning of year			465,995		427,376
	Cash and cash equivalents at end of period		$	681,433	$	465,995

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EX-99.2

design develop deliver advanced technology Q4 and FY 2016 Earnings Presentation February 8, 2017

design develop deliver advanced technology 2 Forward - Looking Statements This document contains forward - looking statements within the scope of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “expect,” “estimate,” “anticipate,” “predict” and similar expressions, and the negatives thereof, often identify forward - looking statements, which are not limited to historical facts. F orward - looking statements include, among other things: guidance for the first quarter of 2017 relating to sales; statements , express or implied, concerning future operating results or margins, the ability to generate sales and income or cash flow; and Benchmark’s business and growth strategies and expected growth and performance. Although Benchmark believes these statements are based upon reasonable assumptions, they involve risks and uncertainties relating to operations , markets and the business environment generally. If one or more of these risks or uncertainties materializes, or underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. All forward - looking statements included in this document are based upon information available to the Company as of the date of this document, and it assumes no obligation to update them. Readers are advised to consult further disclosures on related subjects, particularly in Item 1A, “Risk Factors”, of the Company’s annual report on Form 10 - K for the year ended December 31, 2015, in its other filings with the Securities and Exchange Commission and in its press releases. Non - GAAP Financial Information This document includes certain financial measures, such as operating margin, that exclude items and therefore are not in accordance with generally accepted accounting principles (“GAAP”). A detailed reconciliation between GAAP results and results excluding special items (“non - GAAP”) is included in the Appendix of this document. Management discloses non - GAAP information to provide investors with additional information to analyze the Company’s performance and underlying trends. Management uses non - GAAP measures of net income and earnings per share that exclude certain items in order to better assess operating performance and help investors compare results with our previous guidance. This document also references “free cash flow”, which the Company defines as cash flow from operations less additions to property, plant and equipment and purchased software.

design develop deliver advanced technology 3 CEO Update

design develop deliver advanced technology 4 Fourth Quarter 2016 Summary Revenue and operating margins at the top end of guidance ▪ Stronger than expected Test & Instrumentation and Computing demand ▪ Historical high g ross margin of 9.5%, a 30 bps Q2Q improvement Exceeded working capital target ▪ Achieved cash conversion cycle of 74 days  One day below target of 75  Year - over - year improvement of 20 days ▪ Implementing strategies for further improvement in 2017 Strong cash flows and 38 th consecutive quarter of buybacks ▪ Full year operating cash flows of $ 273 million ▪ Returned $42 million of domestic cash through buybacks in 2016

design develop deliver advanced technology 5 2016 New Business Wins by Segment ▪ 1 9 manufacturing and 12 engineering project awards ▪ Estimated annual revenue run rate between $115 – $140 million ▪ Continued new business wins in targeted markets Estimated Annual Revenue from New Business Wins New Business Wins $115 $120 $120 $125 $125 $118 $123 $128 $- $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150 $160 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 $ (USD M) Q4 New Business Wins Highlights :

design develop deliver advanced technology 6 (In millions, except EPS) Dec 31 , 2016 Dec 31 , 2015 ‘15 to ’16  Y/Y Net Sales $2,310 $2,541 ($231) (9%) Gross Margin $213 $219 ($6) (3%) Gross Margin % 9.2% 8.6% 60 bps SG&A $113 $107 $6 6% SG&A % 4.9% 4.2% 70 bps Non - GAAP Operating Income $100 $112 ($12) (11%) Non - GAAP Operating Margin 4.3% 4.4% (10 bps) Non - GAAP Diluted EPS $1.45 $1.68 ($0.23) (14%) ROIC 8.4% 10.2% (180 bps) For the Twelve Months Ended 2016 Financial Summary

design develop deliver advanced technology 7 Keys to Higher ROIC: ▪ Drive higher revenues with balanced mix ▪ Optimize base ▪ Continue cash conversion cycle improvement 112 100 4.4% 4.3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 0 50 100 150 200 250 2015 2016 2,541 2,310 8.6% 9.2% 1.0% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 2015 2016 924 986 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2015 2016 Revenue and Gross Margin ($ M ) 2016 Results Return on Invested Capital (LTM) ROIC = [(Non - GAAP income from operations plus stock compensation )*( 1 - Tax Rate )] ÷ [ Average Invested Capital less Average Cash for last 5 quarters] Non - GAAP Operating Margin ($M) 107 113 4.2% 4.9% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 0 50 100 150 200 250 2015 2016 SG&A ($M) ▪ Mix shift to higher - value sectors moderated margin contraction ▪ SG&A increase of $6M for engineering solutions and go - to - market investments ▪ Further investments in 2017 to right - size these teams for long - term growth ▪ Revenue decline of $231 million – in traditional markets ▪ Revenue mix from 55% to 63% in higher - value markets drove margin expansion 10.2% 8.4% 94 8 2

design develop deliver advanced technology 8 CEO Observations • Unique set of highly leverageable assets • Strong customer engagements and a dedicated/ motivated workforce • Federation of sites, built by acquisition of distressed assets and managed independently • Regional company with international sites

design develop deliver advanced technology 9 2017: Our Priorities in a Transition Year Long - Term Revenue Growth ▪ Leverage engineering solutions for higher margin engagements ▪ Balance mix of higher - value and traditional market opportunities ▪ Reorient to a market sector - focused sales organization ▪ Increase bookings to achieve growth beyond 2017 Optimizing our Customer Base ▪ Acquire appropriate new customers aligned to target markets ▪ Focus on margins and asset velocity Elevating Execution ▪ Accelerate operational excellence programs ▪ Balanced network loading to maximize profit per square foot ▪ Continue progress on cash conversion cycle improvements

design develop deliver advanced technology 10 Our Financial Goals Revenue Gross Margin SG&A Non - GAAP Operating Income ROIC Cash Conversion Cycle $2.8 – $3.2B 9.8 – 10% 4.8 – 4.5% >5.5% >12% <70 Days Target Business Model

design develop deliver advanced technology 11 Progress Milestones Revenue Revenue Mix Gross Margin SG&A Profit per Sq Ft Bookings >$250M/Qtr >70% Higher - Value Markets 9.8 – 10% 4.5 – 4.8% >$45 Target Bookings >$150M/Qtr >66% >9.5% ~5% ~$32 Waypoint (2H 2017) $125M/ Q tr 63% 9.2% 4.9% $27 Current (as of 12/31/16)

design develop deliver advanced technology 12 Balanced Capital Deployment Focus on Generating Cash from Operations ▪ Continued emphasis on cash conversion cycle improvements  Target range of 73 to 68 days ▪ Anticipate 2017 cash from operations in the range of $125 - 150 million Strong Balance Sheet Provides Flexibility ▪ Net cash position of $458 million ▪ Leverage ratio of 1.6x debt to EBITDA multiple is reasonable and aligned with peers ROIC: Key Determinant of Capital Allocation Strategy ▪ Organic growth through targeted investments ▪ Close - to - core, bolt - on M&A with capabilities to enable growth ▪ Share repurchases optimized for returns based on applicable law

design develop deliver advanced technology 13 Q4 & 2016 Financial Highlights

design develop deliver advanced technology 14 (In millions, except EPS) Dec 31 , 2016 Sep 30 , 2016 Q/Q Dec 31 , 2015 Y/Y Net Sales $608 $574 6% $626 (3%) Non - GAAP Operating Margin 4.8% 4.3% 50 bps 4.8% --- Non - GAAP Diluted EPS $0.45 $0.36 25% $0.48 (6%) GAAP Operating Margin 3.9% 3.1% 80 bps 3.5% 40 bps GAAP Diluted EPS $0.37 $0.44 (16%) $0.77 (52%) ROIC 8.4% 8.6% (20 bps) 10.2% (180 bps) For the Three Months Ended Guidance Provided for the December 31, 2016 Quarter: ▪ Revenue (in millions) $590 – $610 ▪ Diluted EPS – non - GAAP $0.39 – $0.43 Fourth Quarter 2016 Financial Summary See APPENDIX 1 for a Reconciliation of GAAP to non - GAAP Financial Results

design develop deliver advanced technology 15 Higher - Value Markets Dec 31 , 2016 Sep 30 , 2016 Q/Q Industrials 37% $230 38% $217 6% Medical 14% $86 15% $86 --- Test & Instrument. 11% $65 11% $66 (1%) Total Revenue $381 $369 3% Traditional Markets Dec 31 , 2016 Sep 30 , 2016 Q/Q Computing 20% $120 19% $107 12% Telecommunication s 18% $107 17% $98 8% Total Revenue $227 $205 10% Benchmark Revenue Results by Market Sector For the Three Months Ended Industrials, Computing and Telecommunications Up for Q4 - 16 (1) (1) (1) In millions (1) (1) Dec 31 , 2015 Y/Y 35% $223 3% 15% $92 (6%) 8% $51 26% $366 4% Dec 31 , 2015 Y/Y 25% $155 (23%) 17% $105 2% $260 (13%) (1) (1)

design develop deliver advanced technology 16 30.1 21.9 24.3 24.7 29.1 4.8% 4.0% 4.2% 4.3% 4.8% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 0.0 10.0 20.0 30.0 40.0 50.0 60.0 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 626 549 579 574 608 9.1% 9.2% 9.1% 9.2% 9.5% 1.0% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 0 200 400 600 800 1,000 1,200 1,400 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 10.5% 10.2% 9.6% 9.1% 8.6% 8.4% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Revenue & Gross Margin ($ M ) Key Business Trends Return on Invested Capital (LTM) ROIC = [(Non - GAAP income from operations plus stock compensation )*( 1 - Tax Rate )] ÷ [ Average Invested Capital less Average Cash for last 5 quarters] Non - GAAP Operating Margin ($M) 26.8 28.5 28.5 28.1 28.4 4.3% 5.2% 4.9% 4.9% 4.7% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 SG&A ($M)

design develop deliver advanced technology 17 (In millions, except EPS) Dec 31 , 2016 Dec 31 , 2015 Y/Y Net Sales $2,310 $2,541 (9%) Non - GAAP Operating Margin 4.3% 4.4% (10 bps) Non - GAAP Diluted EPS $1.45 $1.68 (14%) GAAP Operating Margin 3.3% 3.7% (40 bps) GAAP Diluted EPS $1.29 $1.83 (30%) ROIC 8.4% 10.2% (180 bps) For the Twelve Months Ended Fiscal Year 2016 Financial Summary Traditional Market Revenue Decline Did Not Impact Operating Margin

design develop deliver advanced technology 18 Higher - Value Markets Dec 31 , 2016 Dec 31 , 2015 Y/Y Industrials 38% $874 32% $820 7% Medical 15% $346 14% $351 (1%) Test & Instrument. 11% $244 9% $224 9% Total Revenue $1,464 $1,395 5% Traditional Markets Dec 31 , 2016 Dec 31 , 2015 Y/Y Computing 19% $445 22% $551 (19%) Telecommunication s 17% $401 23% $595 (33%) Total Revenue $846 $1,146 (26%) 2016 Revenue Results by Market Sector For the Twelve Months Ended Higher - Value Markets Up 5% YoY, Well Short of our 10% YoY Target (1) (1) (1) In millions (1) (1)

design develop deliver advanced technology 19 (In millions) Dec 31, 2016 Dec 31, 2015 Dec 31 , 2016 Sep 30 , 2016 Dec 31, 2015 Cash Flows from (used in) Operations $273 $147 $44 $70 $28 FCF $240 $109 $38 $61 $23 Cash $681 $466 $681 $636 $466 International $626 $424 $626 $592 $424 US $55 $42 $55 $44 $42 Inventory $381 $412 $381 $396 $412 Accounts Receivable $441 $479 $441 $417 $479 Accounts Payable $326 $251 $326 $309 $251 Cash Flow / Working Capital Highlights For the Three Months Ended (1) Free cash flow (FCF) defined as net cash provided by operations (GAAP) less capex 1 For the Twelve Months Ended Generated $273 million of Cash from Operations in 2016

design develop deliver advanced technology 20 Working Capital Update Exceeded 75 - day target exiting the year 99 91 90 94 99 83 80 75 74 25 45 65 85 105 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Target Q4-16 Accounts Receivable Days Accounts Payable Days Inventory Days Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Accounts Receivable Days 71 68 67 69 68 66 65 65 Accounts Payable Days 39 43 43 40 39 47 53 53 Inventory Days 67 66 66 65 70 64 68 62 Cash Conversion Cycle 99 91 90 94 99 83 80 74

design develop deliver advanced technology 21 Share Repurchases 38 th Consecutive Quarter of Stock Repurchases $ 532 million returned to shareholders since 2007 $93 m illion remaining on authorized purchase plan Inception to 2016 2011 - 2016 Last 3 Years $US Stock Repurchases (M ) $532 $299 $154 Buyback % of FCF 51% 50% 35% 56.3 47.1 41.2 43.8 68.4 41.9 59.8 56.6 54.8 54.2 52.1 49.7 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 0 10 20 30 40 50 60 70 80 90 100 2011 2012 2013 2014 2015 2016 Share Repurchases Shares Outstanding

design develop deliver advanced technology 22 Guidance Net Sales (in millions) $530 – $550 Operating Margin – non - GAAP* 3.0% – 3.4% Diluted EPS – non - GAAP* $0.24 – $0.28 * The above guidance excludes the impact of amortization of intangible assets and estimated restructuring charges – See Appendix 1 First Quarter 2017 Guidance

design develop deliver advanced technology 23 Higher - Value Markets Q1 - 17 Outlook (%) Industrials Down High - Singles Medical Up Mid - Singles Test & Instrumentation Up >10% Traditional Markets Q1 - 17 Outlook (%) Computing Down >30% Telecommunication s Down >15% Benchmark Modeling Information Expected sequential growth in Medical and Test & Instrumentation (1) Q1 - 17 Guidance Interest Expense (in millions) $2.3 Effective Tax Rate 19%

design develop deliver advanced technology 24 Appendix

design develop deliver advanced technology 25 APPENDIX 1 - Reconciliation of GAAP to non - GAAP Financial Results (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) Dec 31, Sep 30, Dec 31, 2016 2016 2015 2016 2015 $ 23,548 $ 18,082 $ 21,905 $ 75,638 $ 92,969 2,663 3,485 6,308 12,539 13,861 2,893 3,170 1,923 11,838 4,962 $ 29,104 $ 24,737 $ 30,136 $ 100,015 $ 111,792 $ 18,568 $ 21,742 $ 39,421 $ 64,047 $ 95,401 2,663 3,485 6,308 12,539 13,861 2,893 3,170 1,923 11,838 4,962 (1,781) (2,207) (2,234) (7,695) (5,495) - (8,270) (21,174) (8,270) (21,174) $ 22,343 $ 17,920 $ 24,244 $ 72,459 $ 87,555 Basic $ 0.38 $ 0.44 $ 0.78 $ 1.30 $ 1.85 Diluted $ 0.37 $ 0.44 $ 0.77 $ 1.29 $ 1.83 Basic $ 0.46 $ 0.37 $ 0.48 $ 1.47 $ 1.70 Diluted $ 0.45 $ 0.36 $ 0.48 $ 1.45 $ 1.68 Basic 49,063 48,965 50,482 49,298 51,573 Diluted 49,544 49,414 50,914 49,825 52,088 *CS *CE Income from operations (GAAP) Net income (GAAP) Year EndedThree Months Ended December 31, Restructuring charges and other costs Amortization of intangible assets (1) (1) Beginning with the third quarter of 2016, our non-GAAP income and earnings per share exclude the impact of the amortization of intangible assets. The non-GAAP earnings per share for prior periods presented above exclude the impact of the amortization of intangible assets. (2) This amount represents the tax impact of the non-GAAP adjustments using the applicable effective tax rates. calculating earnings per share: Non-GAAP income from operations Non-GAAP net income Earnings per share: (GAAP) Earnings per share: (Non-GAAP) Restructuring charges and other costs Discrete tax benefits Weighted-average number of shares used in Income tax adjustments (2) Amortization of intangible assets (1)