Benchmark Electronics Inc. (NYSE:BHE) Q3 2017 Earnings Conference Call Transcript

Oct 18, 2017 • 05:00 pm ET

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Benchmark Electronics Inc. (NYSE:BHE) Q3 2017 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Benchmark Electronics, Incorporated Third Quarter 2017 Earnings Conference Call. (Operator Instructions). As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, VP of Strategy and Investor Relations, Ms. Lisa Weeks. Ms. Weeks, you may begin.

Executive
Ms. Lisa Weeks

Thank you, operator, and thanks, everyone, for joining us today for Benchmark's Third Quarter 2017 Earnings Call. With me this afternoon, I have Paul Tufano, CEO and President; and Don Adam, CFO. Paul will provide introductory comments, and Don will provide a detailed review of our third quarter financial results and fourth quarter outlook. We will conclude our call with a Q&A session.

After the market close today, we issued an earnings release highlighting our financial performance for the third quarter, and we have 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.

Please take a moment to review the forward-looking statements advice on Slide 2 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 facts are forward-looking statements, which involve risks and uncertainties described in our press release and SEC filings. Actual results may differ materially from these statements, and Benchmark undertakes no obligation to update any forward-looking statements. The company has provided a reconciliation of our GAAP to non-GAAP measures in the earnings release as well as in the appendix of the presentation.

I will now turn the call over to our CEO, Paul Tufano.

Executive
Paul Tufano

Thank you, Lisa, and good afternoon, everyone, and thank you for joining our call. If you turn to the third quarter summary in the slide deck -- first off by saying that I'm very pleased with our performance this quarter. It's the fifth consecutive quarter that we met or exceeded our commitments, and we're very pleased with that.

From a revenue perspective, we generated $604 million of revenue. That's up 5% year-on-year. This is the third consecutive quarter of revenue growth. That growth is really fueled by performance in four of our various market sectors. Our Aerospace and Defense sector grew 16% year-over-year, primarily with broad-based growth from existing customers. Our Medical segment grew 17% year-over-year. This is the first quarter of year-on-year growth of any significance since the second quarter of '16. We are pleased with that. It's primarily driven by growth in our cardio and diabetic care programs. Our Test & Instrumentation segment grew 34% year-over-year. We are especially fortunate to have a broad engagement of semi-cap equipment manufacturers in our portfolio. And given the strength of that sector, we are enjoying good growth. And finally, we saw Computing up 16% year-over-year, driven by storage and security providers.

From a gross margin standpoint, we posted 9.4 points of