During Q2, we achieved revenue of $491 million, which was down sequentially from Q1, but supported by strong demand in our Medical and Semi-Cap sectors.
Non-GAAP gross margin for the quarter was 7% and non-GAAP earnings per share were $0.07.
Our non-GAAP earnings include $4 million or $0.10 per share of COVID related costs that we could not fully anticipate as we entered the quarter.
Our cash conversion cycle for the quarter was 84 days.
Despite operating challenges, we generated $23 million in cash flow from operations and returned $6 million of cash to shareholders as part of our recurring quarterly dividend payment.
Further, our revamped go-to-market organization has grown the manufacturing and engineering services opportunity pipeline by over 30% in the past 12 months, and have delivered three quarters of sequential growth in bookings, which bodes well for our long-term growth potential.
As we look out to the end of the year, we are still on track to exit 2020 with at least 9% gross margin and we expect to build on this momentum into 2021.
Where possible we are continuing to permit about 20% of our employees to work from home.
As we entered Q2, our Penang, Malaysia operations, which includes our largest precision machining facility operated at 50% capacity based on local restrictions, which were subsequently lifted at the end of April.
The 100% shutdown that impacted our Tijuana operations was lifted in mid-May after we passed some inspection and were given authorization to operate by the Baja's state.
There has been a phase return to work since this time and the Tier 1 sites are now operating at approximately 75%.
Our Guadalajara facility has been essentially operating at 75% productivity due to at-risk employees being required to stay home for the Jalisco state government restrictions.
Total Benchmark revenue was $491 million.
Medical revenues for the second quarter increased 14% sequentially and were up 18% year-over-year from continued new product ramps, strength throughout our medical customers and increasing demand for critical devices necessary to support the COVID-19 fight, including X-ray and ultrasound devices, ventilators and diagnostic equipment, which we estimate is approximately a third of our sequential growth.
Semi-Cap revenues were up 5% in the second quarter and up 39% year-over-year from continued strong demand across our Semi-Cap customers.
A&D revenues for the second quarter decreased 26% sequentially due to approximately $15 million lower revenue from our commercial aerospace programs, which is approximately 30% of the sectors revenue.
Industrial revenues for the second quarter decreased 15% sequentially.
Demand for products in the oil and gas industry, which is approximately 20% of our revenue, continued to be generally soft and will likely stay soft for the remainder of the year.
Overall, the higher value markets represented 81% of our second quarter revenue.
In the traditional markets, computing was up 20% quarter-over-quarter from new program ramps and two engineering and manufacturing programs in high-performance computing.
Telco was down 10% sequentially.
Our traditional markets represented 19% of second quarter revenues.
Our top 10 customers represented 44% of sales for the second quarter.
Our revenue of $491 million reflects a decrease on a quarter-over-quarter basis.
Our GAAP loss per share for the quarter was $0.09.
Our GAAP results include restructuring and other one-time costs totaling $5.7 million.
$3.3 million is related to the severance and other items for the announced closure of our Angleton site which Jeff will cover in more detail in his initiatives update.
$1.2 million is related to the completion of our San Jose closure and the remaining is due to other various restructuring activities around our network.
For Q2, our non-GAAP gross margin was 7%, a 140 basis points sequential decline.
As Jeff stated earlier, our results were negatively impacted by $4 million of costs related to COVID-19 including site shutdown days pursuant to government orders, idle and not fully productive labor costs, personal protective equipment and incremental freight charges.
We expect the second quarter to be the lowest quarterly gross margin in fiscal year 2020, and we still believe that we can exit 2020 at, at least 9% of gross margin.
Our SG&A was $28.5 million, a decrease of $3.1 million sequentially and $3 million year-over-year due to the cost containment measures, which we have continued, including salary reductions for certain management personnel, including the executive team, freezing travel, reducing discretionary spending and delaying hiring in addition to our reduction in variable compensation expense.
Operating margin was 1.2%, a decrease from 2.3% in Q1 due to lower revenue, reduced gross margin offset by the lower SG&A.
In Q2 2020, our non-GAAP effective tax rate was 29%, which was higher than expected for the quarter due to the distribution of income across our network and certain discrete tax items.
The higher tax impact was approximately $0.01 per share.
Non-GAAP earnings per share was $0.07 for the quarter and non-GAAP ROIC was 5.9%.
Our cash balance was $356 million at June 30, with $194 million available in the US.
Our cash balances include $30 million of proceeds from borrowings under our revolving line of credit.
At June 30, we were at a positive net of debt cash position of approximately $183 million which was higher than the end of Q1 by approximately $12 million.
We generated $23 million in cash flow from operations and $13 million free cash flow after netting $10 million of capital expenditures.
Our accounts receivable balance was $302 million, a decrease of $16 million from the prior quarter.
Contract assets were $154 million at June 30 and $160 million at March 31.
Payables were down $11 million quarter-over-quarter.
Inventory at June 30 was $364 million, up $26 million quarter-over-quarter.
Our cash conversion cycle days was 84.
In Q2, we continued to pay a quarterly cash dividend of approximately $5.8 million.
As a reminder, we increased our recurring quarterly cash dividend to $0.16 per share on February 3, 2020.
We expect revenue to range from $490 million to $530 million.
Our non-GAAP diluted earnings per share is expected to be in the range from $0.26 to $0.30 or a midpoint of $0.28.
Capex for the year will be approximately $30 million to $35 million as we prioritize investments to support new customers and expand our production capacity for future growth.
Implied in our guidance is a 2.9% to 3.1% operating margin range for modeling purposes.
We expect to incur restructuring and other non-recurring costs in Q3 of approximately $800,000 to $1.2 million.
Other expenses net is expected to be $2.4 million, which is primarily interest expense related to our outstanding debt.
We expect that for Q3, our non-GAAP effective tax rate will be in the range of 20% to 22%, because of the distribution of income around our global network.
The expected weighted average shares for Q3 are 36.7 million.
I will start with the Medical sector where demand grew almost 14% sequentially from Q1 and is forecasted to remain strong throughout the rest of the year from new program ramps in imaging systems and for critical care and diagnostic devices supporting COVID-19.
Our A&D sector is comprised of approximately 70% defense related products and 30% aerospace.
We see limited recovery for customers supporting oil and gas through 2020, which represents approximately 20% of sector revenue.

Summary:
Non-GAAP gross margin for the quarter was 7% and non-GAAP earnings per share were $0.07.
Total Benchmark revenue was $491 million.
Our GAAP loss per share for the quarter was $0.09.
Non-GAAP earnings per share was $0.07 for the quarter and non-GAAP ROIC was 5.9%.
We expect revenue to range from $490 million to $530 million.
Our non-GAAP diluted earnings per share is expected to be in the range from $0.26 to $0.30 or a midpoint of $0.28.