Benchmark Reports Fourth Quarter and Fiscal Year 2024 Results

BHE

Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the fourth quarter and year ended December 31, 2024.

Fourth quarter 2024 results(1):

Full year 2024 results(1):

Three Months Ended

December 31,

September 30,

December 31,

(Amounts in millions, except per share data)

2024

2024

2023

Sales

$

657

$

658

$

691

Net income

$

18

$

15

$

18

Income from operations

$

29

$

28

$

32

Net income – non-GAAP(1)

$

22

$

21

$

23

Income from operations – non-GAAP(1)

$

33

$

35

$

38

Diluted earnings per share

$

0.50

$

0.42

$

0.49

Diluted earnings per share – non-GAAP(1)

$

0.61

$

0.57

$

0.65

Operating margin

4.3

%

4.3

%

4.6

%

Operating margin – non-GAAP(1)

5.1

%

5.3

%

5.5

%

Year Ended

December 31,

(Amounts in millions, except per share data)

2024

2023

Sales

$

2,656

$

2,839

Net income

$

63

$

64

Income from operations

$

109

$

110

Net income – non-GAAP(1)

$

84

$

85

Income from operations – non-GAAP(1)

$

135

$

139

Diluted earnings per share

$

1.72

$

1.79

Diluted earnings per share – non-GAAP(1)

$

2.29

$

2.38

Operating margin

4.1

%

3.9

%

Operating margin – non-GAAP(1)

5.1

%

4.9

%

(1)

A reconciliation of non-GAAP results to the most directly comparable GAAP measures and a discussion of why management believes these non-GAAP results are useful are included below.

“The past year has reinforced that our strategy is working, as we have continued to drive margin expansion and free cash flow generation. Our demonstrated execution across cycles gives me confidence in our ability to continue to drive value for our stakeholders,” said Jeff Benck, Benchmark’s President and CEO.

Benck continued: “We will continue to focus on maintaining financial discipline during this dynamic environment, while strategically investing in our future growth. To that end, we are breaking ground on our fourth building in Penang, Malaysia in support of our ongoing momentum in the Semiconductor Capital Equipment sector.”

Cash Conversion Cycle

December 31,

September 30,

December 31,

2024

2024

2023

Accounts receivable days

57

51

59

Contract asset days

23

26

23

Inventory days

85

89

99

Accounts payable days

(54

)

(54

)

(53

)

Advance payments from customers days

(22

)

(22

)

(30

)

Cash conversion cycle days

89

90

98

Fourth Quarter 2024 Industry Sector Update

Revenue and percentage of sales by industry sector were as follows.

December 31,

September 30,

December 31,

(In millions)

2024

2024

2023

Semi-Cap

$

198

30

%

$

188

28

%

$

168

24

%

Complex Industrials

140

21

151

23

132

19

Medical

117

18

107

16

126

18

A&D

117

18

102

16

102

15

AC&C

85

13

110

17

163

24

Total

$

657

100

%

$

658

100

%

$

691

100

%

Revenue decreased quarter over quarter primarily due to decreases in Advanced Computing and Communications (AC&C) sales, which were partially offset by increases in Semi-Cap and A&D sales. Revenue decreased year-over-year primarily due to decreases in Medical and AC&C sales, which were partially offset by increases in Semi-Cap and A&D sales.

First Quarter 2025 Guidance

Fourth Quarter 2024 Earnings Conference Call

The Company will host a conference call to discuss the results today at 5:00 p.m. Eastern Time. The live webcast of the call and accompanying reference materials will be accessible by logging on to the Company’s website at www.bench.com. A replay of the broadcast will also be available on the Company’s website.

About Benchmark Electronics, Inc.

Benchmark provides comprehensive solutions across the entire product life cycle by leading through its innovative technology and engineering design services, leveraging its optimized global supply chain and delivering world-class manufacturing services in the following industries: semiconductor capital equipment, complex industrials, medical, commercial aerospace, defense, and advanced computing and communications. Benchmark’s global operations include facilities in seven countries and its common shares trade on the New York Stock Exchange under the symbol BHE.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts and may include words such as “anticipate,” “believe,” “intend,” “plan,” “project,” “forecast,” “strategy,” “position,” “continue,” “estimate,” “expect,” “may,” “will,” “could,” “predict,” and similar expressions of the negative or other variations thereof. In particular, statements, express or implied, concerning the Company’s outlook and guidance for first quarter and fiscal year 2025 results, future operating results or margins, the ability to generate sales and income or cash flow, expected revenue mix, the Company’s business strategy and strategic initiatives, the Company’s repurchases of shares of its common stock, the Company’s expectations regarding restructuring charges, stock-based compensation expense, amortization of intangibles, award of any tax incentives and capital expenditures, and the Company’s intentions concerning the payment of dividends, among others, are forward-looking statements. Although the Company believes these statements are based on and derived from reasonable assumptions, they involve risks, uncertainties and assumptions that are beyond the Company’s ability to control or predict, relating to operations, markets and the business environment generally, including those discussed under Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and in any of the Company’s subsequent reports filed with the Securities and Exchange Commission. Events relating to the possibility of customer demand fluctuations, supply chain constraints, continuing inflationary pressures, the effects of foreign currency fluctuations and high interest rates, geopolitical uncertainties including continuing hostilities and tensions, trade restrictions and sanctions, or the ability to utilize the Company’s manufacturing facilities at sufficient levels to cover its fixed operating costs, may have resulting impacts on the Company’s business, financial condition, results of operations, and the Company’s ability (or inability) to execute on its plans. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes, including the future results of the Company’s operations, may vary materially from those indicated. Undue reliance should not be placed on any forward-looking statements. Forward-looking statements are not guarantees of performance. All forward-looking statements included in this document are based upon information available to the Company as of the date of this document, and the Company assumes no obligation to update.

Non-GAAP Financial Measures

Management discloses certain non-GAAP information to provide investors with additional information to analyze the Company’s performance and underlying trends. These non-GAAP financial measures exclude restructuring charges, stock-based compensation expense, amortization of intangible assets acquired in business combinations, certain legal and other settlement losses (gains), customer insolvency losses (recoveries), asset impairments, other significant non-recurring costs and the related tax impacts of all of the above. A detailed reconciliation between GAAP results and results excluding certain items (“non-GAAP”) is included in the following tables attached to this document. In situations where a non-GAAP reconciliation has not been provided, the Company was unable to provide such a reconciliation without unreasonable effort due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. Management uses non-GAAP measures that exclude certain items in order to better assess operating performance and help investors compare results with our previous guidance. This document also references “free cash flow”, a non-GAAP measure, which the Company defines as cash flow from operations less additions to property, plant and equipment and purchased software. The Company’s non-GAAP information is not necessarily comparable to the non-GAAP information used by other companies. Non-GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as a measure of the Company’s profitability or liquidity. Readers should consider the types of events and transactions for which adjustments have been made.

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

Three Months Ended

Year Ended

December 31,

December 31,

2024

2023

2024

2023

Sales

$

656,887

$

691,354

$

2,656,105

$

2,838,976

Cost of sales

588,962

620,350

2,386,081

2,567,906

Gross profit

67,925

71,004

270,024

271,070

Selling, general and administrative expenses

37,470

35,646

149,460

147,025

Amortization of intangible assets

1,204

1,204

4,817

5,979

Restructuring charges and other costs

727

2,054

6,336

8,402

Income from operations

28,524

32,100

109,411

109,664

Interest expense

(6,175

)

(8,692

)

(26,922

)

(31,875

)

Interest income

2,879

2,033

10,208

6,256

Other expense, net

(1,350

)

(3,105

)

(8,802

)

(2,825

)

Income before income taxes

23,878

22,336

83,895

81,220

Income tax expense

5,455

4,784

20,568

16,905

Net income

$

18,423

$

17,552

$

63,327

$

64,315

Earnings per share:

Basic

$

0.51

$

0.49

$

1.76

$

1.81

Diluted

$

0.50

$

0.49

$

1.72

$

1.79

Weighted-average number of shares used in calculating earnings per share:

Basic

35,973

35,658

35,970

35,566

Diluted

36,659

35,956

36,759

35,973

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In Thousands)

(UNAUDITED)

December 31,

December 31,

2024

2023

Assets

Current assets:

Cash and cash equivalents

$

315,152

$

277,391

Restricted cash

12,875

5,822

Accounts receivable, net

412,458

449,404

Contract assets

167,578

174,979

Inventories

553,654

683,801

Prepaid expenses and other current assets

42,512

44,350

Total current assets

1,504,229

1,635,747

Property, plant and equipment, net

225,097

227,698

Operating lease right-of-use assets

117,995

130,830

Goodwill and other long-term assets

292,143

280,480

Total assets

$

2,139,464

$

2,274,755

Liabilities and Shareholders’ Equity

Current liabilities:

Current installments of long-term debt

$

6,737

$

4,283

Accounts payable

354,218

367,480

Advance payments from customers

143,614

204,883

Accrued liabilities

144,530

136,901

Total current liabilities

649,099

713,547

Long-term debt, net of current installments

250,457

326,674

Operating lease liabilities

108,997

123,385

Other long-term liabilities

17,598

32,064

Total liabilities

1,026,151

1,195,670

Shareholders’ equity

1,113,313

1,079,085

Total liabilities and shareholders’ equity

$

2,139,464

$

2,274,755

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(UNAUDITED)

Year Ended

December 31,

2024

2023

Cash flows from operating activities:

Net income

$

63,327

$

64,315

Depreciation and amortization

46,144

45,410

Stock-based compensation expense

13,366

15,286

Accounts receivable

33,953

42,050

Contract assets

7,401

8,634

Inventories

127,840

45,071

Accounts payable

(18,283

)

(35,320

)

Advance payments from customers

(61,269

)

6,946

Other changes in working capital and other, net

(23,254

)

(18,098

)

Net cash provided by operating activities

189,225

174,294

Cash flows from investing activities:

Additions to property, plant and equipment and software

(33,253

)

(77,739

)

Other investing activities, net

486

601

Net cash used in investing activities

(32,767

)

(77,138

)

Cash flows from financing activities:

Share repurchases

(5,100

)

Net debt activity

(74,283

)

5,509

Other financing activities, net

(29,723

)

(29,087

)

Net cash used in financing activities

(109,106

)

(23,578

)

Effect of exchange rate changes

(2,538

)

2,205

Net increase in cash and cash equivalents and restricted cash

44,814

75,783

Cash and cash equivalents and restricted cash at beginning of year

283,213

207,430

Cash and cash equivalents and restricted cash at end of year

$

328,027

$

283,213

Benchmark Electronics, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Results

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

Three Months Ended

Year Ended

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Sep 30,

Jun 30,

Dec 31,

2024

2024

2024

2024

2023

2023

2023

2024

2023

Income from operations (GAAP)

$

28,524

$

28,105

$

27,253

$

25,529

$

32,100

$

30,341

$

24,481

$

109,411

$

109,664

Restructuring charges and other costs

727

795

1,471

3,343

2,054

1,437

2,364

6,336

7,281

Stock-based compensation expense

2,626

4,379

4,185

2,176

2,955

3,674

3,867

13,366

15,286

Amortization of intangible assets

1,204

1,205

1,204

1,204

1,204

1,592

1,591

4,817

5,979

Asset impairment

198

923

1,121

Legal and other settlement loss

239

367

317

855

1,778

Customer insolvency (recovery)

(316

)

(316

)

Non-GAAP income from operations

$

33,320

$

34,851

$

34,114

$

33,107

$

38,313

$

37,242

$

33,226

$

135,392

$

139,331

GAAP operating margin

4.3

%

4.3

%

4.1

%

3.8

%

4.6

%

4.2

%

3.3

%

4.1

%

3.9

%

Non-GAAP operating margin

5.1

%

5.3

%

5.1

%

4.9

%

5.5

%

5.2

%

4.5

%

5.1

%

4.9

%

Gross profit (GAAP)

$

67,925

$

66,741

$

67,950

$

67,408

$

71,004

$

69,077

$

67,031

$

270,024

$

271,070

Stock-based compensation expense

503

413

326

426

416

420

423

1,668

1,655

Customer insolvency (recovery)

(316

)

(316

)

Non-GAAP gross profit

$

68,428

$

67,154

$

67,960

$

67,834

$

71,420

$

69,497

$

67,454

$

271,376

$

272,725

GAAP gross margin

10.3

%

10.1

%

10.2

%

10.0

%

10.3

%

9.6

%

9.1

%

10.2

%

9.5

%

Non-GAAP gross margin

10.4

%

10.2

%

10.2

%

10.0

%

10.3

%

9.7

%

9.2

%

10.2

%

9.6

%

Selling, general and administrative expenses

$

37,470

$

36,636

$

38,022

$

37,332

$

35,646

$

35,509

$

37,672

$

149,460

$

147,025

Stock-based compensation expense

(2,123

)

(3,966

)

(3,859

)

(1,750

)

(2,539

)

(3,254

)

(3,444

)

(11,698

)

(13,631

)

Legal and other settlement loss

(239

)

(367

)

(317

)

(855

)

(1,778

)

Non-GAAP selling, general and administrative expenses

$

35,108

$

32,303

$

33,847

$

34,727

$

33,107

$

32,255

$

34,228

$

135,984

$

133,394

Net income (GAAP)

$

18,423

$

15,374

$

15,528

$

14,002

$

17,552

$

20,412

$

13,991

$

63,327

$

64,315

Restructuring charges and other costs

727

795

1,471

3,343

2,899

1,437

2,364

6,336

8,126

Stock-based compensation expense

2,626

4,379

4,185

2,176

2,955

3,674

3,867

13,366

15,286

Amortization of intangible assets

1,204

1,205

1,204

1,204

1,204

1,592

1,591

4,817

5,979

Asset impairment

198

923

1,121

Legal and other settlement loss (gain)

239

367

317

855

(37

)

(3,375

)

(1,155

)

1,778

(4,567

)

Customer insolvency (recovery)

(316

)

(316

)

Income tax adjustments(1)

(971

)

(1,406

)

(1,437

)

(1,393

)

(1,280

)

(529

)

(1,484

)

(5,207

)

(4,816

)

Non-GAAP net income

$

22,248

$

20,714

$

20,952

$

20,187

$

23,293

$

23,409

$

20,097

$

84,101

$

85,444

Diluted earnings per share:

Diluted (GAAP)

$

0.50

$

0.42

$

0.43

$

0.38

$

0.49

$

0.57

$

0.39

$

1.72

$

1.79

Diluted (Non-GAAP)

$

0.61

$

0.57

$

0.57

$

0.55

$

0.65

$

0.65

$

0.56

$

2.29

$

2.38

Weighted-average number of shares used in calculating diluted earnings per share:

Diluted (GAAP)

36,659

36,629

36,497

36,401

35,956

35,876

35,676

36,759

35,973

Diluted (Non-GAAP)

36,659

36,629

36,497

36,401

35,956

35,876

35,676

36,759

35,973

Net cash provided by operations

$

45,916

$

39,036

$

55,816

$

48,457

$

137,079

$

37,583

$

24,538

$

189,225

$

174,294

Additions to property, plant and equipment and software

(9,032

)

(9,814

)

(8,504

)

(5,903

)

(11,026

)

(19,664

)

(8,318

)

(33,253

)

(77,739

)

Free cash flow

$

36,884

$

29,222

$

47,312

$

42,554

$

126,053

$

17,919

$

16,220

$

155,972

$

96,555

(1)

This amount represents the tax impact of the non-GAAP adjustments using the applicable effective tax rates.

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