Benchmark Electronics Inc. (NYSE:BHE) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 05:00 pm ET


Benchmark Electronics Inc. (NYSE:BHE) Q4 2018 Earnings Conference Call Transcript


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Good day, and welcome to the Benchmark Electronics Fourth Quarter and Full-Year 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Lisa Weeks, Vice President of Strategy and Investor Relations. Please go ahead.

Lisa K. Weeks

Thank you, operator, and thanks, everyone, for joining us today for Benchmark's fourth quarter and full-year 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 the detailed review of our fourth quarter and full-year 2018 results. 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 fourth quarter and full year. 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 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 fact are forward-looking statements, which involve risks and uncertainties described in our press releases 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.

Paul J. Tufano

Thank you, Lisa, and thank you for joining our call. If you turn to Slide 5, we capped 2018 with strong results in the fourth quarter. Revenue and non-GAAP EPS were both above our guidance. Revenue in Q4 was $657 million and for the full year was approximately $2.6 billion, which reflects 5% year-over-year revenue growth. This was driven primarily by strength in A&D, Telco and Medical. Non-GAAP operating margins improved 30 basis points to 3.2% quarter-over-quarter. This is despite continued softening in our Test and Instrumentation sector, which was down 25% year-over-year. Our EPS on a non-GAAP basis was $0.41, above our guidance. Our cash conversion cycle days were 62 days and for the full year at 68 days, this was at the low end of our target range of 73 to 68 days.

Cash from operations was approximately $94 million in the quarter and $77 million (ph) for the full year, which is above our expected $30 million to $50 million range that we outlined earlier in 2018. We have continued aggressively buyback our shares. For 2018, we have repurchased $212 million of our stock and reduced our outstanding share count by 17%. We continue to prudently repurchase shares and through yesterday, we repurchased $17 million