Ladies and gentlemen, thank you for standing by. And welcome to the Benchmark Electronics Third Quarter 2009 Earnings Conference Call. At this time, all lines are in a listen-only mode. Later, there will be a question-and-answer session and instructions will be given at that time. (Operator Instructions). As a reminder, today's call is being recorded. At this time, I'd like to turn the conference over to Don Adam. Please go ahead.

Good morning, welcome to the Benchmark Electronics conference call to discuss our financial results for the third quarter of 2009. I'm Don Adam, CFO of Benchmark Electronics. Today, we would begin our call with Cary Fu, our CEO, discussing the overall business environment for Benchmark. Gayla Delly, our President who will discuss our activities and performance in the third quarter as well as our outlook for the next quarter. I will follow with review of our financial metrics for the third quarter. After our prepared remarks, Gayla, Cary and I will take time for your questions in our Q&A session. And we will hold this call to one hour. During this call, we will...we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We would like to caution you that those statements reflect our current expectations and that actual events or results may differ materially. We also like to refer you to Benchmark's periodic report that are filed from time to time with the Securities and Exchange Commission included in the company's 8-Ks and S-4 filings, quarterly filings and Forms 10-Q and our Annual Report on Form 10-K. These documents contain cautionary language and identify important risk factors which could cause actual results to differ materially from our projections or forward-looking statements. We undertake no obligation to update those projections or forward-looking statements in the future. Now, I will turn the call over to Cary.

Thank you, Don. Good morning. We appreciate you joining us today. As Benchmark, we are pleased with how we are executing in this challenging but improving environment. We are encouraged to see that our focused efforts we saw in the revenue growth, funds that exceeding our guidance. And improve our recent metrics in the third quarter of 2009. We are excited to see the operating margins benefit our hard work. And we saw leverage revenues are increasing. We expect this trend will tend to continue as with our effect of product mix and as demand level stabilize. Though we haven't seen any change in demand from our customers, we are also seen some changes on supply chains. Component lead time has begin to stretch out with strategically the first reaction in the time like this. During the quarter we saw a strong shipment from all other industry sector reserves, except the telecommunications sector, where we saw a slight decrease. Sequentially, comparing the revenue of Q3 to Q2, as it is some effective were up 80%, industrial control sector was up 16%, medical sector was up 10%, computer sector were up 1% and telecommunication was down 4%, mainly due to the products inflation in the segment. In Q3 and into Q4, we see our customers are gaining more comfortable with the economic environment which demonstrated by the spending and by the trends. In Q3, we continue to see increased law of order with the lead time, looking Q4; there are continuously positive signs that the economy begins to slowly recover with increase in demand as a complement from our customers. And we continue our focuses on growth, profitability and investment in the futures. We will continue to provide excellent service to customers for some new business at work may opportunities, manage our cost and maintaining a strong balance sheet and the cash position. We are completing our global alignment -- footprint alignment and are taking action in two higher cost locations. In Q3, we incurred 3.8 million in restructuring charges currently related to a reduction of capacity into one of our European sites. We also have announced one of the U.S. location and expect to incur additional restructuring charge about 3 to 4 million as part of our restructuring plans which is in annual savings of approximately 20 million once completed. Our team's effort continues to be strong and positive. With our dedicated team, our strong balance sheet and profitability, we are well positioned to continue our growth and benefit optimal movement in chance in time. Now I will turn the call to over to Gayla Delly, President of Benchmark Electronics.

Thank you, Cary. Our third quarter results evidence the continued execution of our plans driving sales and bookings while maintaining tight spending controls. We have a largely positive about, we are encouraged by the growth during Q3. And the operating margin leverage benefits to bottom-line. This strength is seen even while we are supporting the steady flow of NPI activities resulting from our recent bookings, which we have discussed and these do provide some downward pressure on our margins. We believe that our profitability improvements will continue provided a consistent product mix due to our cost control measures and the strength of our financial model. We continue to be focused on providing flexible support for our customers, including our recent extension of capabilities and precision machining, which has provided additional service scope for our customers. We now have an expanded level of service offerings for our customers. Specifically for the higher end and systems integration products which customers are responding to quite favorably. During Q3, our revenues were 510 million, which was at the higher end of our guidance and was up 6% from Q2. Our operating margin excluding special items was up from Q2 which demonstrates that our financial model is working showing increased operating leverage. At the time of our last conference call, we noticed that the pipeline of opportunities was strong and that we are working on several substantial new program opportunities. Our actual bookings for Q3 include one of those opportunities and yet another has been booked in Q4. During Q3, we've booked nine new programs with an estimated current annual revenue rate of 120 to 166 million. And as I noted, this does include one of the significant programs which we had mentioned last quarter. Our new program opportunities are with both new and existing customers. And they are in the industrial control, testing and instrumentation, medical and telecommunication industry sectors. Due to the current market condition, the timing and actual future revenue from these bookings are uncertain at this time. Our Q4 has shaping up to be strong for bookings also with the strong pipeline continuing. And it will include another substantial opportunity which we mention. Our team is working to ensure that we can continue to differentiate ourselves with our execution and our service model. Given our solid operational and financial metrics, we are confident in our ability to support our customers, both current and future in this dynamic environment. Based on our current outlook, we expect another quarter of sequential growth with fourth quarter revenues estimated to be in the range of 520 to 560 million, and our corresponding earnings per share for the fourth quarter in the range of $0.22 to $0.26 excluding restructuring charges. At this time, I'll turn the call over to Don to discuss our financial metrics for Q3.

Thank you, Gayla. We completed the third quarter of 2009 with revenues of 510 million. These revenues were at the higher end of our revenue guidance of 470 to 520 million provided during our last conference call and were up 6% over the second quarter. As Cary noted we saw a stronger shipments for all the industry sectors we serve for telecommunications. The diversification efforts have been successful. Diversification among the industries that we serve and also diversifications within those industries that is computing sector has grown and include a number of customers. Our earnings per share for the quarter was $0.27 excluding restructuring charges and a discrete tax benefit related to our previously closed facility. Note that this tax benefit -- again the tax benefit has been excluded from the non-GAAP -- for non-GAAP purposes. Our non-GAAP earnings per share also includes several discrete tax benefits, the largest of which was due to a tax benefit recorded related to a revaluation loss in Mexico. For the fourth quarter, we anticipate that our effective tax rate will range between 9 and 10%. Our results for the third quarter of 2009 include two special items, restructuring charges of 3.8 million and again a discrete tax benefit related to a previously closed facility. Restructuring charges incurred during the quarter were primarily related to the reduction of capacity in Europe and was both facility and severance related. And regarding more meaningful comparative analysis, we will present certain financial information excluding these special items during this conference call. We recall your attention to the fact that this item is excluded when we do so. In today press release, we have included a reconciliation of our GAAP results of the results excluding these special items. Our gross margin for the third quarter was 7.2%, again…

Thank you. (Operator Instructions). Our first question then comes from the line of Alex Blanton with Ingalls & Snyder. Please go ahead Alex Blanton - Ingalls & Snyder: Hi. Good morning.

Good morning. Alex Blanton - Ingalls & Snyder: I wanted to ask you about the components shortages. You are not the only one that seeing them and given the sales decline has been in this industry, what is the real reason for this? You think there would be a lot of spare component capacity at this point. So why are the retimes now stretching out?

Very good question. I believe that the answers too is that, during the downturn the economic environment was such that capacity was reevaluated throughout the extended supply chain and as that was done whether it was people or people and facilities...people facilities and equipment. Throughout the extended supply chain, you saw the actions we required to align capacity to demand and try to best alliance with forward-looking quarters with demand levels that were visible. The strength in demand that we've seen returned first of all, has comeback within lead time which we've mentioned both last quarter and this quarter that we've seen probably not as much visibility as far out as we may see in a more normalize period. So the reaction has had to be very quick to response to the increased demand. With that, not all of the capacity has been able to come up to speed as rapidly as it's needed to respond the end-customer demand. So, I think that we will see things aligned, again to the extent that it was people related, people will be brought back in to the extent that it was facility related that may take a little bit more time to restart some equipment is better. But I believe that a part of that will reconcile itself as headcount is brought back in or second, third shift whatever the case may be are addressed. Alex Blanton - Ingalls & Snyder: But what kind of components are in the greater share to planning. Are we talking shifts, are we talking in other kinds of components or just what?

I believe it's somewhat across the board; it's hard to say everything is, that you are not seeing it solely in one commodity. You're seeing the make to order items with extended lead times of course, that's normal because of the complexity involved with make to order and may be potentially some of other training that's required for bringing back and some of the employees to support those types of items. On the active components side since a lot of that is probably driven by consumer demand that's partially seasonal aligned with demand. It's probably driven by China and some of their stimulus packages both to the extend that any of...in our world any of that components that we utilize to support our customers or comment with those used and our consumer products, there is demand challenges there in the supply chain. Alex Blanton - Ingalls & Snyder: Well, let me just...I don't want to take up too much time but I don't see that force lease was reduced in component companies. And I can't imagine that they scrap around of equipment. So, is it mainly people related and I know if you take to bring back people to meet and increase in demand, it's really kind of...I haven't seen this happened in other industries to this extent?

I think it is primarily people that we're seeing brought back in. again this is through the extended supply chains so there is many touch points that we're reaching out and identifying. But to a great extent it is people and it is training of people and getting people in the right geographies to support the increased demand. The second thing is, I think there was capacity primarily equipment taken offline or shutdown. And so some of the production lines may have been off. For instance in testing and instrumentation, they may have been offline for quite near a year. So, it is just kind of retrying the engine if you will and I would expect to see that the reaction is pretty quick. And people are going to be cautious in this economic environment to not over hire and try to respond to potentially a bottoming and a increase and treat it as if it was a complete revamp. So I think that caution is the other aspect we're seeing here as trying to calibrate what the environment and the appropriate response is. Alex Blanton - Ingalls & Snyder: Thank you.

Thanks. And your next question comes from the line of Brian White with Ticonderoga. Please go ahead.

Hi, Brian.

Hi, Brian.

Hi, could we talk a little bit about the trends you expect in the December quarter by end-market? It looks like testing and instrumentation had a big uptake in the September quarter, can this continue and what do we expect from telecom and computing?

As you know, we don't provide guidance on an industry and forecast basis but generally, we'll give you some color on what we're seeing overall in the market place. As you probably recall in more traditional times, computing strength in Q2 and for as opposed to Q1 and 3, so we would expect a slight improvement in Q4, all things being equal in computing. Testing and instrumentation is a significant uptake from a very-very low point and I think we'll expect to see some continued -- probably not at the same rate but some continued opportunities for growth and testing and instrumentation. Medical's probably flattish and I say that as we continue to get reads from our customers because there is a mixed bag of reaction to all over the talk and buzz surroundings the medical world today with healthcare in the forefront and a lot of budget and R&D and investment decisions being made. And so that's probably one of the unknown outcomes that we would look forward in Q4 as to really how strong that holds through. And telecom, we'd which expect to see a bit of a bounce back as Cary indicated, good bit of dynamics we saw in Q3 were related to crossover and lifecycle products and new product introduction. So, I think that telecom will see some potential growth there. Industrial control are starting to see some signs of increases if you look at the complete industry that we have in industrial controls. Some of the industries that are served such as oil and gas, ultimately are lifecycle and they are actually seeing some overall, I think industrial control will see a modest improvement but not as strong as some of the other industries. So that's just generically without specific math what we see in the marketplace.

Okay. And what -- did you have any customers over 10% in the quarter?

Yeah Brian, we did have one customer that was in the computing sector and IBM related product.

Okay. So IBM was the 10% per customer for the first time, it sounds like?

No not the 10%.

No not the 10%. Correct.

Okay. And just on the one of your customers is going through an acquisition, I know you can't comment on the acquisition but does that have any impact on your computing sales in the year quarter or in the outlook?

I got a puzzled look on my face Brain because there is more than one that are on acquisition. It's the matter of which part of the acquisition they're on. But, specifically on our significant customer, historically, we don't have any comment and are reading as I am sure you are on the day-by-day updates that are available in the marketplace understand how that unfolds.

Okay. Thank you

Thanks. And our next question comes from the line of William Stein with Credit Suisse. Please go ahead.

Thanks. First I'd like to just a follow-up on the shortages. Did that meaningfully hurt the revenue opportunity in the September quarter and do you anticipate that to continue in December or alleviate?

I think it probably throttled back what we otherwise would have been able to ship for Q3, I did say that we did had some shortages that prevented us from achieving probably next half revenue. We are still thing that into Q4, I think there are lot of actions in place by suppliers to try to remedy that, of course they would like execute during in good shape. So it's really going to be determined over the next few weeks as to how quickly they can respond to the upside end demand not just from us from others interesting and our industry.

Was this across end markets or in a particular end market that you have this issue?

I think it pretty much touched all markets. I didn't see anyone left out of that.

And any chance you're willing to quantify approximately how much the revenue could have been if you didn't have this problem? Are we taking 1% difference or is it more meaningful?

No, I don't have the actual numbers. But I wouldn't want to see it from the headphone (ph).

Okay. How about pricing related to that, I mean what I have heard speculate is that suppliers are reluctant to add back the capacity and are using it to try to get price. Are you seeing that request by suppliers?

No, I think traditionally what we see is exactly what we're seeing again. The first step is always lead time per shall (ph). So, extendedly times and then, OEM and EMS players that are challenged to meet demand. And the next thing is they feel stronger about pricing power. I don't think that you will see that level of strength currently as primarily around trying to fetch down the economy first.

Thanks. And one other Gayla if I can. I think you mentioned something about precision machining, as the new service. Is that -- you guys are getting into the components' business or the let's say enclosures that all plastic but -- did I get that right?

We're probably at the other end, on the high-end side, however I don't see us going into the lower end of componentary and in the plastics at this time, but it's on the higher-end concision machining capabilities that we've added.

Sort of new, part of a broader new strategy or just small incremental offering, any characterization that would be helpful?

I think we see opportunities again on the higher-end to support customers. Much as we talk about systems integration for computing in telco for some of the complexities that around the final systems and software but not in the other industries outside of telecom and computing, we find that the precision machining and getting to a higher level assembly that is the type of service. So we're still focused our efforts or see our focus primarily on the service side not on commoditize component. So more on the complex side.

Great. Thank you very much.

Thank you. And our next question comes from the line of Sherri Scribner with Deutsche Bank. Please go ahead.

Hi. Thank you. I was hoping to get a little detail on your outlook for longer term operating margins. You've made some good improvements, you've taken a lot of restructuring actions. In the past, I think we have seen operating margins in the 4.5 to 5% range and I am just curious, do you feel comfortable with those operating margins? They seem reasonable considering all the changes that you made and when do we start -- what sort of revenue run rates do we need to get back to those numbers?

Yeah I think longer term we're still -- our long-term goals still 4.5 to 5%, I think over the near term in more realistic operating margins around 4%. In terms of what we hit that again I think we saw some pretty good improvement again in this quarter, in terms of the 4% and I think if we're in the $600 million range, we should start to see 4% operating margins or above.

Okay, that's helpful. Thank you.

Thanks. And our next question comes from the line of Awin Fox with CLSA. Please go ahead.

Hi, it's Steve Fox with CLSA. Good morning. Gayle well just another question on the component shortages, is this a situation where you guys are wind up paying a penalty back to the OEM. Is the OEM coming in just wait with their own end product orders and that's creating the problem. And so they are the one that has to pay up for the components, I mean obviously there is some extra manpower that goes into tracking this stuff down but how would -- what's the financial implication I guess is my question?

The financial implications -- our margins are not strong enough to be taking financial risk on a modeling out of supply chain. So we actually act in comfort with our customers and do the scenario planning, so what-a-thing with them. In this environment what you're seeing is this is what would typically refer to at low chase where the demand is coming in within a stated and known lead time and yeah that's an opportunity where our customers speak to meet the needs at the end customer and respond within lead time. So, we do see it as the working in concert with our customers, and not a -- not taking a penalty on them.

It does have an impact on just efficiencies for you tracking down those components for the development?

Absolutely, that's always the case. But believe me, I think everyone in our industry would agree that it's an environment we do not mind surviving through.

Right. And then just secondly on -- just going back to the computing seasonality. You said up but may be up slightly if I heard you right. So is that more of a function of the customer base or are your customers not expecting a normal seasonal uptick in the December quarter?

I think, what we are seeing as we look out overall is that there is a greater strength in computing on the PC side and some strength in servers and high-end potentially not as much as we see on the PC side. So, it's really going to be a function of how strong the demand comes through on the high-end as opposed to just the PC side.

Thank you. And your next question then comes from the line of Sean Hannan with Needham & Company. Please go ahead. Sean Hannan - Needham & Co.: Yes, thank you.

You're welcome. Sean Hannan - Needham & Co.: Is it possible, if you folks can talk a little bit around obviously a couple of years ago you did a Penstar deal and you brought along a lot of engineering capabilities with that. Embedded I think within some of the wins that you'll discuss are our engineering programs. And I just want to see if we can get some color around what is that you're seeing in terms of engineering activity and the focus of some of those programs et cetera?

I think that's a very good point, we may not have highlighted. In this environment you have seen a lot of opportunities to withstand relationship with customers and the design and engineering focus area. We are seeing -- we have got opportunities there and in terms of our revenue, we don't see it as a specific significant percentage of our revenue. But clearly as on-boarding of new opportunities which lead to strong revenue inflows. We do see an increased focus on engineering in fact globally. Sean Hannan - Needham & Co.: Are there specific segments where you are getting a little bit more momentum or where that focus has perhaps changed for you over the course of the last couple of years or as we look at the current environment today?

I don't think we've seen specifically a change as much as we've seen an intensified focus by OEMs to identify engineering potentially as another point of leveraging and cost savings that they can have as they partner with us on for engineering solutions.

Thank you. And our next question comes from the line of Brian Alexander with Raymond James. Please go ahead.

Hey, Brian.

Good morning just as the component environment loosens over the next couple of quarters and given the changing end-market mix that you guys are seeing in your own business where you have different inventory turns in various end-markets, how should we think about overall inventory turns going forward? Obviously your inventories were very low this quarter and I assume some of that's the tight component environment. So I'm just trying to a sense for how to think about that once things normalize?

Well, we'd love to see the inventory turns retain as we already said at 6.5% of that has as much to do with the supply chain as you indicated clearly with the upside end revenues that we see for Q4, all things normalize, we probably would not have the inventories quite as tight as they are. Having said that we're continuing to drive efficiencies in our supply chain management that we can achieve 6.5 turns. It's a balancing act. I think our teams are well engaged on trying to manage the upside for customers and keep our inventory turns up.

Great. And then just along the lines of how your end markets make is changing with computing continuing to come down, how should we think about normal seasonality for revenue as we move throughout 2010? Thanks.

In terms of normal seasonality I think still a little bit difficult to grab. So I think if I look to 2010, meaning more toward to the traditional model where Q4 is the strongest, Q1 is typically little wider and then Q2, Q3 would probably be sort of in between. But again this is sort of my sense but I think in terms of where it ultimately ends up is a little bit difficult to discern at this point in time.

Thank you. And our next comes from the line Jim Suva with Citi. Please go ahead

Thank you and congratulations everyone. A quick question. Don, I think you made a comment of operating margins of 4% in the 600 million revenue area, did you mean 600 million flat or like the range between 6 and 700. Because if I look at your guidance, you're within close distance there but if back in the margins it's actually quite monumental far away from 4% margin. So can you just maybe clarify or reconfirm if I heard that right?

The way our -- we think our model is working right now is again if you get to around $600 million in revenue, we would anticipate an operating margin of approximately 4%.

Okay. Now that's very impressive. And then our Gayla, you were talking a little bit about the precision-machining business. Can you talk a little bit about -- right now is that like 10% of your business, 5% of your business, 1% of your business. And what type of profitability did that have?

It is clearly not a significant reportable portion of our business at this point in time but its an on-trade point, its an opportunity to expand and both and level of revenue and the profitability. So it is an opportunity that we are seizing and not one that we have kind of a reporting sector or nature of the business. So much like engineering, it's a great solution to be providing to our customer and a focus for us but it's not as significant.

Thank you. And we do have a question from the line of Sean Hannan with Needham & Company. Please go ahead.

Yes, I just wanted to see if I could follow-up. There were -- of wins that you've discussed, you, I think have specified that there is a win that was not included in the nine which were 120 to 166 million -- a large notable win for Q4, is that correct?

Correct. It did not need the (inaudible). So it's a much likely treat account and we have our bookings cut off and it didn't need to cut off there.

Okay. Thanks very much.

Thanks. We're going to back to the line of Jim Suva with Citi with a question. Please go ahead.

Great. Quick follow-up Gayla. Traditionally, your company has not been vertical and now it appears at least you are starting to step into that a little bit. Why the change your customer ask you to do that are you seeing opportunity and should we expect more select vertical areas to continue?

Yes we see this as on opportunity, we see it as the market place in concert with our customers we have determined is not well formed, and provides us opportunities and again we call it verticals but may be that's not an alignment with the definition of verticals is traditionally is been a industry because vertical typically with me only points in the supply chain, the in-feed and to electronic manufacturing. So, this is really kind of going veridical on the upper end not on the lower end. So, but to eliminate confusion that we should have used another terminology. But, I do expect us to continue to seek out and take advantage of opportunities to meet the meet the needs of our customers which are some what differentiated from that lower end vertical play

Thank you very much for clarifying.

Thanks. And we do have a question from the line of Ryan Jones with RBC Capital Market. Please go ahead.

Hi. Good morning, if I am correct there is a little less than $65 million still outstanding on your buyback program with only about $4 million of purchases last quarter and 6 million this quarter. And maybe you said you expand about 5 million this quarter. Can you offer us any guidance on how you might approach the buyback in the December quarter and using through 2010?

We look at this on an ongoing basis and consider that with potential other opportunities. Again, our expectation is to -- again as you pointed out, we have purchased about 5.7 million, almost $6 million since the end of the quarter. In terms of the purchases, we'll continue to evaluate those in balance with the other requirements in terms of -- with the other cash requirements

All right. Then just one follow-up question, Don you know that the tax provision excluding revaluation related with the closed facility includes several additional tax discrete items if I'm correct. I was wondering with the total value of those benefits were and I know that the Mexico benefit was 2.4 million. But, what I am trying to get is, non-GAAP tax rate excluding all the discrete benefits.

I mean as we said Q4, we said our tax rate going forward is about 9 to 10%

Great thank you. (Operator Instructions). Alright and sir your line is open again.

Yeah, that was fine.

All right, great, Thanks. And at this time then we are showing no further questions in queue.

I want to thank everyone for joining us today. We will be in our office if there's additional follow-up. Thanks very much.

Great thank you. And ladies and gentlemen, that does conclude our conference for the day. Thanks for your participation and for using AT&T's Executive Teleconference. You may now disconnect.