Apr 25, 2018 • 05:00 pm ET



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Good day, ladies and gentlemen, and welcome to the Benchmark Electronics First Quarter 2018 Earnings Conference Call. (Operator Instructions) As a reminder, this call is being recorded.

I would now like to introduce your host for today's conference, Lisa Weeks, VP of Strategy and IR. Please go ahead, ma'am.8

Lisa Weeks

Thank you, Christie, and thanks, everyone, for joining us today for Benchmark's First Quarter 2018 Earnings Call. With me this afternoon, I have Paul Tufano, CEO and President; and Roop Lakkaraju, CFO. Paul will provide introductory comments, and Roop will provide a detailed review of our first quarter financial results and second quarter outlook. We will conclude our call with a Q&A session.

After the market closed today, we issued an earnings release highlighting our financial performance for the first quarter of 2018, 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.

(Forward-Looking Cautionary Statements)

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

Paul Tufano

Thank you, Lisa, and good afternoon, ladies and gentlemen. If you would please turn to slide 4.

I would characterize Q1 as a solid quarter for Benchmark. We met and actually exceeded our commitments on both revenue and EPS. Revenue was $608 million for the quarter, up 9% year-over-year. We had good growth across the majority of our segments. Gross margin was 9.5%, a 40 basis point improvement year-over-year, and non-GAAP operating income was 3.7%, a 10 basis point year-over-year improvement. EPS on a non-GAAP basis, $0.41, $0.09 year-over-year. Our cash cycle days were 68, at the low end of our target range. Operating cash flow was $25 million, and our ROIC was 11.2%, a 230 basis point growth from a year-ago period.

If you turn to page 5, we are making good progress on bookings. As you all know, revenue growth is critical for us to achieve our long-term financial model, and bookings are critical to revenue growth. For the second (ph) quarter, we generated $171 million worth of bookings. And of those bookings, 63% were in our higher-value markets and 37% in traditional markets.

If I could give you a little color on some of those wins as it related to the quality of the bookings. In Industrial, which was 30% of our bookings, we had a very nice win in smart cities as well as a win on electric vehicle chargers for electric automobiles (ph). In A&D, we have a variety of wins across the board for comms devices, for land vehicles, for ammunitions and for high-end specialized filters for military applications.

In the Medical segment, we had -- 17% of our bookings came from Medical, with two very nice wins, one for an endoscopy device, the other for optical image stabilizer for use on MRI machines. In Computing, which was 32% of our