Hello, and welcome to the Benchmark Electronics to report first quarter 2024 results conference. At this time, all parties are in a listen-only mode. Later, you will have an opportunity to ask questions. To ask a question, press Star and one on your phone keypad. It is Star and one. If you'd like to ask a question, you can remove yourself from the queue by pressing Star two. Please note that this call is being recorded, and I will be standing by should you need any assistance. I would now like to turn the conference over to Paul Manske, Benchmark Investor Relations and Corporate Development. Please begin. Thanks, everyone, for joining us today for Benchmark's first quarter fiscal year 2024 earnings call. Joining me this afternoon are Jeff Benck, CEO and President, and Arvind Kamal, Interim CFO. After the market closed today, we issued an earnings release pertaining to our financial performance for the first quarter of 2024, and we prepared a presentation that we are referencing on this call. Both are available online under the Investor Relations section of our website at benchmark.com. This call is being webcast live, and a replay will be available online following the call. The company has provided a reconciliation of our GAAP to non-GAAP measures in the earnings release, as well as in the appendix to the presentation. Please take a moment to review the forward-looking statements disclosure on slide 2 in the presentation. During our call, we will discuss forward-looking information. As a reminder, any of today's remarks, which are not statements of historical fact, are forward-looking statements, which includes risks and uncertainties as described in our press releases and SEC filings. Actual results may differ materially from these statements. Benchmark undertakes no obligation to update any forward-looking statements. For today's call, Jeff will begin by providing a summary of our first quarter performance. Arvind will then discuss our detailed financial results and provide our second quarter guidance. Jeff will then return to share more insight into demand trends by sector, new business wins, and close with some final remarks. If you will please turn to slide three, I will turn the call over to our CEO, Jeff Benck. Thank you, Paul. Good afternoon, and thanks to everyone for joining our call today. The first quarter was another strong performance by the team that's described by controlling what we can control. These results were clear indicators of our continued progress toward our long-term objectives. Despite persistent macro-driven revenue challenges across many of our end markets, we continue to meet or exceed our margin, non-GAAP EPS, and free cash flow objectives in the quarter. Let me step through a few highlights. Total revenue of $676 million was down 3% year-over-year and 2% sequentially. We were pleased with the continued solid performance in A&D and double-digit growth in Semi-Cap, despite the lack of industry recovery. However, these positives were offset primarily by weakness in our Medical and communications sectors. Our non-GAAP gross margins again exceeded 10%, which reflected a continuation of our multi-quarter trend of year-over-year gross margin expansion. Excluding stock-based compensation, we achieved 4.9% non-GAAP operating margin in Q1, which was up 50 basis points year-over-year. On a sequential basis, operating margins were down due to seasonally higher payroll taxes and variable expenses. These operating results allowed us to deliver $0.55 in non-GAAP earnings per share in the quarter. We achieved $0.51 of non-GAAP earnings per share when including $0.04 of stock-based compensation expense, which, on a like-for-like basis, was $0.03 above the high end of our guidance range of $0.42-$0.48. At the same time, our working capital initiatives put in place last year are delivering results. Notably, first quarter inventory was down over $140 million year-over-year, which was a key enabler to us being able to deliver positive free cash flow of $43 million. We have now been free cash flow positive for four consecutive quarters, totaling just north of $200 million over this period. Given this performance and our expectations looking forward, we are raising our free cash flow target for the year from $70 million-$80 million to now $80 million-$90 million. I'd like to once again say how pleased I am with the team's ability to come together, particularly in this volatile marketplace, and again, consistently deliver results. Now, let me pass it over to Arvind to share more details on the March quarter and guidance for Q2 2024. Thank you, Jeff, and good afternoon. Please turn to slide 5 for our revenue by market sector. As Jeff mentioned, our total revenue in Q1 was $676 million. Semi-Cap revenue increased 12% year-over-year, slightly ahead of our expectations. Industrial revenue for the first quarter decreased 2%, driven by reduced demand from some existing customers, which outpaced the benefit of new program ramps. Medical revenue was down 16%. This decline was due to general softness across the industry, driven by inventory rebalancing and demand normalization. A&D revenue was up 33%, driven by continued strength in Commercial Aerospace. Within defense, we are benefiting from increased demand from existing programs and incremental support from new program ramps. ... Advanced Computing decreased 6%, consistent with expectations. This modest decrease was due to some minor delays in large HPC program build we commenced in Q4, that will partially carry over into Q2. In the Next-G eneration Communication sector, revenue was down 36% year-over-year. Sector performance was impacted by both general softness and sub-sector specific dynamics. Coupled with our disengagement with a large customer, we do not expect sector revenues to improve during 2024. Please turn to slide 6. Our GAAP earnings per share for the quarter was $0.38. As we indicated last quarter, during Q1, we undertook an assessment of our approach to non-GAAP reporting, specifically as it relates to stock-based compensation. Although we will continue to measure our business on a GAAP basis, we believe providing non-GAAP results, excluding stock-based compensation, enables a more direct comparability to our peers. As such, beginning in Q1, all references to non-GAAP, both historical and prospective, exclude the effect of stock-based compensation. Please refer to both the earnings presentation and press release for reconciliation information. For Q1, our non-GAAP gross margin was 10%, both with and without stock-based compensation. This represents a 30 basis point decrease sequentially, and a 70 basis point increase year-over-year. Non-GAAP SG&A expense was $34.7 million, excluding $1.8 million of stock-based compensation. SG&A was up 5% sequentially and 3% year-over-year. The sequential increase was driven by seasonal payroll taxes, coupled with higher variable compensation expense. Excluding 30 basis points of stock-based compensation expense, non-GAAP operating margin was 4.9%, down 60 basis points sequentially due to the seasonal increase in operating expenses, while up 50 basis points year-over-year, aided by gross margin expansion. Our first quarter non-GAAP effective tax rate was approximately 24%. First quarter non-GAAP EPS was $0.55. On a like-for-like basis, if we include the $0.04 of stock-based compensation expense in the quarter, our non-GAAP EPS of $0.51 was above the higher end of our guidance range of $0.42-$0.48. Non-GAAP ROIC in the first quarter was 9.6%. Please turn to slide 7 for trended financials under our former and current definitions of non-GAAP over the course of last year. Please turn to slide 8 for a discussion of our cash conversion cycle performance. Our cash conversion cycle days in the quarter were 94, compared to 98 in Q4. This 4-day improvement was primarily driven by a $46 million reduction in inventory during the quarter. Please turn to slide 9 for an update on liquidity. Free cash flow generation is a key performance metric for the company. To that end, in Q1, we continued our working capital efficiency efforts, which, combined with our net income performance, enabled us to generate $48 million in operating cash flow and $43 million of free cash flow in the period. Given this performance, coupled with our current forecast throughout the balance of the year, we are raising our full year 2024 target free cash flow to $80 million-$90 million. Our cash balance on March thirty-first was $296 million, a sequential increase of $13 million. As of March thirty-first, we had $126 million outstanding on our term loan, $190 million outstanding against our revolver, and $356 million available to borrow under our revolver. Overall debt, net of cash, improved sequentially by $29 million as we continue to use free cash flow to pay down short-term debt. Please turn to slide 10 for a discussion of our capital allocation activity. We invested approximately $6 million in CapEx in Q1 in support of both continued growth in our Mexico and Penang facilities and enhanced capabilities in our precision technologies unit. We expect Q2 CapEx to be between $10 and $12 million. On a full year basis, we anticipate CapEx to be in the range of $55-$65 million. In Q1, we paid cash dividends of $5.9 million. We did not repurchase any shares in Q1. As of March 31, 2024, we had approximately $155 million remaining in our existing share repurchase authorization. We anticipate resuming share repurchases in 2024. Please advance to slide 11. Turning to guidance, we expect Q2 revenue to be within a range of $615 million-$655 million. Including stock-based compensation, we expect non-GAAP gross margin to be approximately 10%. SG&A unit expense is expected to be within a range of $32 million-$35 million. Our non-GAAP operating margin is expected to be between 4.7% and 4.9%. Non-GAAP operating income excludes approximately $4.4 million of stock-based compensation, $1.2 million in amortization of intangible assets, and $2 million of estimated restructuring and other expenses. Our non-GAAP diluted earnings per share is expected to be in the range of $0.48-$0.54. Other expenses net are expected to be approximately $7 million. Although interest expense is expected to decline sequentially, this will be partially offset by increased foreign exchange headwind. We expect that our Q2 non-GAAP effective tax rate will be 22%-24%, with a weighted average share count of approximately 36 million. Our effective tax rate is higher in 2024 due to the expiration of tax incentives for our operations in China at the end of 2023, and the implementation of global minimum tax laws in some of our foreign jurisdictions beginning in 2024. On a fiscal year basis, we believe the average effective tax rate should be approximately 22%-23%. And with that, I will turn the call back over to you, Jeff. Thanks, Arvind. Please turn to slide 13. Let me start with some further color on our performance by sector. Within Semi-Cap, our first quarter performance was down slightly sequentially, but up 12% year-over-year, which was modestly better than our expectations. This performance, which we believe exceeded the overall market, was driven by our continued share gain. This momentum continued in the first quarter with several wins that expanded an existing program with a customer, which includes higher-level assembly integration. I'm also pleased that our new Penang Precision Technologies facility was awarded a win with a new wafer fab equipment OEM. Our wins in the quarter include both manufacturing and engineering services. We continue to be optimistic about the multiple catalysts driving future growth in the Semi-Cap sector and are pursuing this with continued capital investment. On a near-term basis, we expect continued volatility in demand as the broader CapEx environment remains under pressure and the U.S. CHIPS Act funding is only now beginning to be awarded. However, looking further out to 2025 and beyond, we expect a broad-based recovery in the sector and look forward to gaining more than our fair share of business. In medical, as we saw in the December quarter, and have heard from many who are exposed to the space, sector performance has been challenged, particularly in the health tech subsector. This is a function of both inventory and end demand normalization. Our March quarter revenue was down 16% year-over-year, in line with our expectations. However, we continue to see positive momentum in the form of new wins. Most notably, I'm encouraged by the recent traction we've been seeing in the biotech subsector, where we closed several big wins encompassing both manufacturing and engineering. Looking forward, we expect these new programs will begin to materially contribute in late 2024 into 2025. In the meantime, we expect weakness within Medical to continue into the next few quarters, impacting overall sector growth in 2024. Turning to Complex Industrials, we continue to extend our share in key growth markets, including automation and energy management solutions. For example, this past quarter, we won a manufacturing program to provide key subsystems for a lab automation application. Another key win, which will be manufactured in our Guadalajara facility, is for automated thermal control systems, which supports our commitment to sustainability. Finally, I'd like to mention an engineering win that I'm particularly interested in, which relates to an opportunity in 3D printing that looks very innovative. While we continue to see solid momentum in new wins, both from existing and new customers, our existing programs at a select number of industrial customers are under pressure from broad macro environment softness. Although we anticipate this will be relatively short-lived, we don't expect year-on-year revenue growth to resume in our Complex Industrial sector until late 2024 or into 2025. Now, turning to A&D, we had another strong quarter of revenue performance, up 33% year-over-year, and our new business win momentum continues. Commercial Aerospace has remained strong for us since early in 2023, which we believe will continue based on our order load. Meanwhile, within defense, the U.S. government's commitment to increased spending, along with improved availability of components, has translated into accelerated demand trends. This past quarter, we also saw significant wins across both subsectors, including an expanded opportunity within Commercial Aerospace, providing guidance control systems. Within defense, we displaced a competitor to provide both engineering and manufacturing services for an integrated defense system program. We also saw an existing program expansion and new product, product introduction wins at another major defense customer, principally in support of guidance applications. While our Q2 expectation is for relatively flat performance, this is primarily a function of program timing. The end demand strength we are seeing, coupled with design win momentum, has us positioned for continued A&D growth in 2024. Before turning to Advanced Computing and Next-Generation Communications sector discussions, after careful analysis, beginning with our Q2 2024 quarter ending in June, we'll be combining our reporting on these two sectors into one. Not only does this more accurately reflect the increasing interrelated nature of these sectors, but it more tightly aligns with how we approach these sectors internally. Within Advanced Computing, revenue was slightly better than our forecast during the quarter, down mid-single digits sequentially and year over year. As previously shared in Q1, we delivered a significant percentage of a new HPC program for a large OEM who's deploying the supercomputer at a national lab. This program will wrap up for us early in Q2. We are working on several next gen platforms, which should enable future growth, and we anticipate participating in the AI infrastructure build-outs via these large cluster environments as our OEMs sell into these opportunities. However, given the anticipated timing of these opportunities, coupled with the difficult year-over-year comparisons, we are not currently anticipating a return to annual growth in advanced computing during 2024. Finally, in next-generation communications, we've been highlighting anticipated challenges at the industry level for a few quarters now. The communication sector is seeing broad pressure on capital spending, while at the same time having to manage through their own inventory positions. We have also been experiencing several quarters of weakness with a specific large customer in this segment, which has led to a disengagement. We continue to expect sector revenue to remain under significant pressure throughout the course of the year in 2024. In summary, please turn to slide 14. Once again, I want to congratulate the extended Benchmark team for their performance in the quarter. Despite the challenging market dynamics, we continue to invest in future growth, building on our business with both new logos and expanding our share with existing customers. As I look at our 2024 objectives that we laid out for you last quarter, I believe we achieved high grades. In review, we're committed to managing demand volatility while continuing to progress towards our target profitability objectives. To this end, we have delivered year-on-year Non-GAAP gross and operating margin expansion in each quarter since introducing our 2025 target model in Q4 of 2022. We further committed to working down inventory and driving free cash flow. Our first quarter inventory was down $140 million year-over-year, equal to 17 days of inventory, and we've generated positive free cash flow for 4 quarters in a row and are raising our free cash flow target for 2024. Lastly, we committed to returning capital to investors. We did so in the form of our continued dividend, but didn't complete any buybacks this last quarter. We nonetheless intend to be back in the market in 2024 with an objective of, at minimum, buying enough stock to offsetting annual dilution. I remain confident that we will successfully navigate this dynamic economic environment and come out stronger on the other side. We are making improvements in our operations and investing for the future. We have significantly stepped up our customers' engagement and are pursuing a number of exciting new opportunities while we close several meaningful deals further along in our pipeline. While we are experiencing an unprecedented duration of downturn in Semi-Cap, we continue to outperform that market and believe in the future growth that is sure to arrive in the coming quarters. I will end the prepared remarks where we started them. We're going to maintain focus on those elements of our business that we can control, while best positioning ourselves to maximize the opportunities in front of us as the demand environment improves. With that, I'll now turn the call over to the operator to conduct our Q&A session. Thank you. If you would like to ask a question, please press star and one on your phone keypad. To remove yourself from the queue, press star two. Again, that is star and one if you would like to ask a question. We will take our first question today from Steven Fox with Fox Advisors. Hi, good afternoon. I had a couple of questions. Jeff, first on some of the comments you made around HPC compute. As you look at winning or your customers look at winning large cluster, backend, environment compute business, do you see that as being something that can build into a consistent book of business? 'Cause or does it remain kind of episodic in your mind? And, like, how do you think your services are fitting with that environment? Thanks. And then I had a follow-up. Yeah, yeah, that's a good question. One of the, you know, one thing that we're seeing is that, as folks look to get after AI, we are seeing some of these high-performance compute systems play in that. They are, in general, have been very program-centric for us, particularly we're doing large builds, like for national labs. But I think that, while there'll probably be smaller opportunities, meaning maybe not the scale of a 10,000 node supercomputer, I think that we could see, you know, some broader exposure with smaller systems that might, you know, make that, make that, demand a little less lumpy. Because we have seen in that sector where those large programs, you know, complete, and then we're on to the next one. Although, you know, while we've seen it up and down, I mean, we've had pretty strong business over the last several years. But that's... the AI element is kind of a new opportunity, and we'll have to see how that fills in in the coming quarters. Thanks for that. Then in terms of Semicap, it sounds like the messaging is about the same, in terms of the end market, but you guys are growing year-over-year. You also said you're investing more in certain engineering areas. I was wondering if you could just talk about the mix of the business right now and what you're investing in. I know you've had success in terms of precision machining and invested a lot in that area before the downturn. Maybe just putting all that together and- Yeah Follow up. Okay. All right. Thanks. Sorry, I didn't mean to step on you there. We did have a good quarter in Semicap, and it was up. But we're seeing all the reports, right, from the large OEMs that we support, particularly as we're more heavily weighted to the wafer fab equipment. It's still capital spend, and you know, we believe that, you know, from what we're hearing and from our forecast, that we won't see, you know, significant growth in 2024. I think what's enabling us to do better than the market is we have won quite a bit of new business that is really, you know, starting to flow in and starting to ramp, which is kind of offsetting weakness there and allowing us to do a bit better. We still don't see significant growth in 2024, but we are investing in, and that's a trend that's continued. While we do some great engineering work there, when we reflect an investment, I think in the script, we were really speaking more to a pretty significant capital investment in expanding our precision machining footprint in Malaysia and Penang. We also had a brand-new facility. We had the grand opening with the governor here, you know, a year ago in Mesa, Arizona. So we have, you know, continued to invest in capacity because during the last upcycle, we were really, really heavily utilized. We've got capacity. We certainly see the market coming back. We also referenced that the CHIPS Act, you know, that now we are seeing money in first quarter of this year that's starting to get doled out, but as you can appreciate, those buildings have to come out of the ground, and then capital equipment for wafer fab creation is put into those, and that's really what we feed, right? We build subsystems and systems and modules in support of that. So that's kind of how we're thinking about it right now. Certainly feel like 2025 is gonna be a growth year. We'll see if it flips quicker, but right now we're saying 2024, you know, it's gonna be, you know, more of the same. So, you know- Thank you. Our next question comes from Anja Soderstrom with Sidoti. Hi, and thank you for taking my questions. The first one is, you mentioned you had a disengagement with a customer. Have you seen any other decommits? No. I mean, this, this is, you know, that was specifically in the comms sector, and you know, the challenges that we've seen there with demand being up and down, particularly with the end customers. And so as the business has, you know, come down and shrunk, led to this disengagement, and we reflected that because that's, along with the broad softness, it's weighing on our growth in comms. And that's kind of why, you know, we were explaining a little bit what dynamic is going on there. But beyond that, this was really unique. We haven't seen, you know, we haven't seen, an impact like that from, in any of the other sectors or even others in comms. Thank you. And in terms of the communication sector, what are you hearing, and when do you expect that to sort of come back? In the communication sector, specifically? Mm-hmm. What we're hearing is that some of the, you know, 5G and, and, you know, you think about, fiber solutions and some of the next-generation, networking solutions, some of the large carriers and some of the large operators have just slowed down their deployment there. So, you know, it's put broad macro headwinds on that, on that sector. There's also a lot of activity in the satellite area. We support a number of those customers, and some have done better than others. So, you know, in general, I think that people in this tougher macro environment have been careful about capital spend and feathered that sum, and I think that's also weighing on what we see from a macro. We do have a few customers, one in particular I can think of, where they're deploying broadband into lower served regions, and some of the infrastructure build that supports build-out for broadband everywhere is seeing some growth. And so, you know, it's not that every customer in the sector is necessarily down, but we certainly have seen a broader softness there. And, you know, as we look at some of our peers, you know, we're not alone in some of the messaging around comms, but we just don't see a line of sight to that picking up in 2024. But we're continuing to pursue new opportunities, and we just, you know, we're just in the closing phases of some really good things happening there. So we look—you know, we're, we're more optimistic long term. It's just right now, we don't, we don't see the visibility to growth in 2024. Okay, thank you. That was helpful. And in terms of Medical, what are you, when do you anticipate that to sort of have normalized and you would see the demand come back up after the normalization in inventory? Yeah, and it's good you brought up the inventory, because I think what we're seeing in medical, particularly in the you know, medtech, health tech area, we're seeing that, you know, customers are looking at their inventory position, and they're adjusting that. I think that's probably having a more pronounced effect, and as that works through over the next few quarters, I think it started really at the end of the year, I think we'll see that pop back, and that's got a potential to get there quicker. But again, it's not just any one customer. I think medical in general right now, in those spaces, we're seeing that, you know, post-COVID, there was quite a bit of exuberance about, you know, medical devices and what could be done and where they will go. We've seen that modulate, and we've seen people be more sensitive to their inventory levels. You know, part one of the factors on that is supply chain is getting better. Lead times are coming down. You know, people don't need to hold. Customers, OEMs don't need to hold as much inventory, so we see that sort of adjusting there. But it, but unfortunately, you know, we're certainly not seeing that in Q2, where, you know, we see that growth come back. But, but we're gonna watch it closely and, and sort of anticipate in a few quarters here, we'll start seeing a more broad-based demand strength. Okay, thank you. Thank you. If I could. In terms of the growth margin, you've been very good at keeping that elevated. Now when you think of the Semi-Cap not coming back until 2025, and that's at a higher margin, how should we think about that growth margin going into 2025? Hey, Anja, this is Arvind. So let me just start off by saying, you can see from our guidance, we guided 10% gross margin. And, you know, the things that really underpin that, that type of margin is, you know, there's a three-pronged approach. One is operational efficiency, as we, you know, build demand or drive demand into, you know, our sites, to align the demand part of it. Then there's, you know, the cost actions that we've, you know, talked about for a couple quarters here. In addition to that, there's also right-sizing, where we don't have the demand. And then on the third kind of element of this is, you know, the mix of revenue. So when you think about that, you know, that's where how we get to our 10%, and that's where we think, you know, for as we look out for 2024, that's where we'll be. And naturally, you know, we're not ready to talk about beyond that horizon. So when we get further into the year, we'll give you more texture, as to how we're thinking about margin into 2025. Let me just add a little bit to Arvind's comment. I thought he was spot on, but I also think if you think about the mix with comms being down and, and even compute being down, they're, you know, lower margin than maybe our corporate average, so that's helping maybe a little bit on the mix side. We are also aligning expense to revenue. You know, we've been pretty disciplined about making sure where we have softness, that we're looking at our resources to really protect profitability, even, you know, even when there's pressure on, on things. And then, you know, we do expect, you know, semi-cap to, to help, but until semi-cap really comes back, you know, strongly, you know, we won't get as much top-line margin help. But right now, we're just focused on, you know, how do we continue to maintain this top of industry margin that we're enjoying right now? Okay, thank you. I will get back in queue. Sure, no worries. As a reminder, if you would like to ask a question, press star one on your touch tone phone at this time. We'll take our next question from Jim Ricchiuti with Needham & Company. Hi, good afternoon. This is Chris Grenga for Jim. Thank you for taking the questions. Sure, Chris. Could you just provide a bit more color on the share gains with Semi-Cap? And is it any particular areas that you would call attention to, or anything else you can add there? Yeah, and this one's a little tricky because there's not, you know, an infinite number of customers here, particularly in, on the front end, where we play heavily. But you know, we've been working to make sure we get even exposure across logic and, you know, as well as the memory side of things. So, that is, you know, that is something that we put a lot of energy into. We've also been growing the number of wins with existing customers and continuing to help do more, like move to higher level integration, right? So we might build a frame or machine a platen, or, you know, a piece of the solution that the wafer rides on. But, you know, we're also increasingly looking to do more higher level integration in the clean room environment and just really helping our OEMs, produce solutions and be more of a one-stop shop. And where we can integrate, EMS, you know, manufacturing assembly with precision metal machining, that gives us a really unique advantage because not everyone does both the machining as well as the complex assembly side of things. And so from that standpoint, we've just, you know, kinda continued to grow wallet share with existing customers and, you know, constantly look at adding new logos. We had a new win this particular quarter that was with a new customer in a new region, and we're excited about that, and that should continue to support the share gain that we're working through. And one last thing I might mention, some of those wins, we had pretty strong bookings both in 2022 and 2023 in the Semicap space, kinda before, you know, even when the slowdown was just starting back in 2022. It oftentimes takes, you know, a year, 18 months, 24 months, so we're benefiting a bit from those strong bookings there, and that, that's really why you see us probably, you know, double the growth rate or, or half the decline that others are seeing in the space, because we had those wins, and, and they're contributing to our, our business today. Got it. Appreciate the call. Thank you very much. Sure. No worries. Thank you. We have no further questions at this time, but as a final reminder, if you would like to ask a question, press star and one on your touchtone phone at this time, star and one to ask a question. It seems we have no further questions at this time. I'd like to turn the call back over to Paul Manske for any closing or additional remarks. Thank you, Ian, and thank you everyone for participating in Benchmark's first quarter 2024 earnings call. Please remember to check the events section of the IR website at ir.bench.com for updates to coming investor conferences. With that, we thank you again for your support and look forward to speaking with you soon. Thank you, everyone. This concludes today's presentation. We appreciate your participation. You may disconnect at any time.