EX-99.1 2 bhe-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

FOR IMMEDIATE RELEASE

 

BENCHMARK REPORTS RECORD FISCAL YEAR 2022 RESULTS

 

Fourth quarter 2022 results:

•
Revenue of $751 million, up 19% year-over-year
•
GAAP operating income up 45% year-over-year
•
Non-GAAP operating income up 34% year-over-year
•
GAAP diluted EPS of $0.60, up 71% year-over-year
•
Non-GAAP diluted EPS of $0.60, up 25% year-over-year

 

Full year 2022 results:

•
Revenue of $2,886 million; 28% year-over-year growth
o
Advanced Computing and Next Gen Communications combined revenue growth of 45% year-over-year
o
Industrials revenue growth of 39% year-over-year
o
Medical revenue growth of 28% year-over-year
o
Semi-Cap revenue growth of 31% year-over-year
•
GAAP operating income up 70% year-over-year
•
Non-GAAP operating income up 52% year-over-year
•
GAAP diluted EPS of $1.91, up 93% year-over-year
•
Non-GAAP diluted EPS of $2.09, up 55% year-over-year

 

TEMPE, AZ, February 1, 2023 – Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the fourth quarter and year ended December 31, 2022.

 

 

 

Three Months Ended

 

 

 

Dec 31,

 

 

Sept 30,

 

 

Dec 31,

 

In millions, except EPS

 

2022

 

 

2022

 

 

2021

 

Sales

 

$

751

 

 

$

772

 

 

$

633

 

Net income

 

$

21

 

 

$

19

 

 

$

12

 

Net income – non-GAAP(1)

 

$

21

 

 

$

20

 

 

$

17

 

Diluted earnings per share

 

$

0.60

 

 

$

0.53

 

 

$

0.35

 

Diluted EPS – non-GAAP(1)

 

$

0.60

 

 

$

0.57

 

 

$

0.48

 

Operating margin

 

 

3.6

%

 

 

3.3

%

 

 

2.9

%

Operating margin – non-GAAP(1)

 

 

4.3

%

 

 

3.6

%

 

 

3.8

%

 

 

 

Year Ended

 

 

 

Dec 31,

 

 

Dec 31,

 

In millions, except EPS

 

2022

 

 

2021

 

Sales

 

$

2,886

 

 

$

2,255

 

Net income

 

$

68

 

 

$

36

 

Net income – non-GAAP(1)

 

$

75

 

 

$

49

 

Diluted EPS

 

$

1.91

 

 

$

0.99

 

Diluted EPS – non-GAAP(1)

 

$

2.09

 

 

$

1.35

 

Operating margin

 

 

3.1

%

 

 

2.4

%

Operating margin – non-GAAP(1)

 

 

3.6

%

 

 

3.0

%

 

(1) A reconciliation of GAAP and non-GAAP results is included below.

1

 

“As we close out 2022, I’m proud to see the team’s continued execution of our strategy which culminated in our reporting a record year of revenue and earnings,” said Jeff Benck, Benchmark’s President and CEO. "These results enabled us to exceed the operating targets we laid out more than two years ago, despite the unforeseen global challenges we encountered during this period."

 

Benck continued “Looking forward, we have a new set of objectives, which we introduced at our analyst meeting last November. I am as confident today as I was then in our ability to deliver to our commitments, or better, over the multi-year period.”

 

Cash Conversion Cycle

 

 

 

Dec 31,

 

 

Sept 30,

 

 

Dec 31,

 

 

 

2022

 

 

2022

 

 

2021

 

Accounts receivable days

 

 

59

 

 

 

56

 

 

 

51

 

Contract asset days

 

 

22

 

 

 

22

 

 

 

22

 

Inventory days

 

 

97

 

 

 

95

 

 

 

82

 

Accounts payable days

 

 

(56

)

 

 

(67

)

 

 

(67

)

Advance payments from customers days

 

 

(26

)

 

 

(27

)

 

 

(19

)

Cash conversion cycle days

 

 

96

 

 

 

79

 

 

 

69

 

 

Fourth Quarter 2022 Industry Sector Update

Revenue and percentage of sales by industry sector (in millions) were as follows.

 

 

 

Dec 31,

 

 

Sept 30,

 

 

Dec 31,

 

 

 

2022

 

 

2022

 

 

2021

 

Medical

 

$

144

 

 

 

19

%

 

$

166

 

 

 

21

%

 

$

127

 

 

 

20

%

Semi-Cap

 

 

178

 

 

 

24

 

 

 

186

 

 

 

24

 

 

 

163

 

 

 

26

 

A&D

 

 

90

 

 

 

12

 

 

 

86

 

 

 

11

 

 

 

95

 

 

 

15

 

Industrials

 

 

143

 

 

 

19

 

 

 

155

 

 

 

20

 

 

 

125

 

 

 

20

 

Advanced Computing

 

 

92

 

 

 

12

 

 

 

95

 

 

 

13

 

 

 

60

 

 

 

9

 

Next Gen Communications

 

 

104

 

 

 

14

 

 

 

84

 

 

 

11

 

 

 

63

 

 

 

10

 

Total

 

$

751

 

 

 

100

%

 

$

772

 

 

 

100

%

 

$

633

 

 

 

100

%

 

Overall, revenues were up 19% year-over-year from strength in the Next Gen Communications, Advanced Computing, Industrials, Medical and Semi-Cap sectors.

 

First Quarter 2023 Guidance

•
Revenue between $640 - $680 million
•
Diluted GAAP earnings per share between $0.35 - $0.40
•
Diluted non-GAAP earnings per share between $0.39 - $0.45 (excluding restructuring charges and other costs and amortization of intangibles)
•
This guidance takes into consideration all known constraints for the quarter and assumes no further significant interruptions to our supply base, operations or customers.

 

Restructuring charges are expected to range between $0.2 million and $0.6 million in the first quarter and the amortization of intangibles is expected to be $1.6 million in the first quarter.

 

2

 

Fourth Quarter 2022 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 for one year 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: commercial aerospace, defense, advanced computing, next generation telecommunications, complex industrials, medical, and semiconductor capital equipment. Benchmark's global operations include facilities in seven countries and its common shares trade on the New York Stock Exchange under the symbol BHE.

 

For More Information, Please Contact:

Paul Mansky, Investor Relations and Corporate Development

512-580-2719 or paul.mansky@bench.com

 

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 estimated financial impact of the COVID-19 pandemic, the Company’s outlook and guidance for first quarter and fiscal year 2023 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 and amortization of intangibles, 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, 2021, and in any of the Company’s subsequent reports filed with the Securities and Exchange Commission. In particular, these statements also depend on the duration, severity and evolution of the COVID-19 pandemic and related risks, including the emergence and severity of its variants, the availability of vaccines and potential hesitancy to utilize them, government and other third-party responses to the crisis and the consequences for the global economy, the Company’s business and the businesses of its suppliers and customers. Events relating to the possibility of customer demand fluctuations, supply chain constraints, continued inflationary pressures, the effects of foreign currency fluctuations and high interest rates, geopolitical uncertainties including trade restrictions, 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 our operations, may vary materially from those indicated. Undue reliance should not be placed on any forward-looking statements. Forward-looking statements

3

 

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 non‐GAAP information to provide investors with additional information to analyze the Company’s performance and underlying trends. 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”, 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.

###

4

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Sales

 

$

750,644

 

 

$

633,054

 

 

$

2,886,331

 

 

$

2,255,319

 

Cost of sales

 

 

678,517

 

 

 

570,998

 

 

 

2,631,096

 

 

 

2,049,418

 

Gross profit

 

 

72,127

 

 

 

62,056

 

 

 

255,235

 

 

 

205,901

 

Selling, general and administrative expenses

 

 

39,540

 

 

 

37,731

 

 

 

150,215

 

 

 

136,700

 

Amortization of intangible assets

 

 

1,592

 

 

 

1,591

 

 

 

6,384

 

 

 

6,384

 

Restructuring charges and other costs

 

 

4,049

 

 

 

4,099

 

 

 

8,567

 

 

 

13,699

 

Ransomware incident related costs (recovery), net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,944

)

Income from operations

 

 

26,946

 

 

 

18,635

 

 

 

90,069

 

 

 

53,062

 

Interest expense

 

 

(5,466

)

 

 

(2,257

)

 

 

(12,894

)

 

 

(8,472

)

Interest income

 

 

887

 

 

 

89

 

 

 

1,730

 

 

 

540

 

Other income (expense), net

 

 

3,860

 

 

 

(387

)

 

 

5,437

 

 

 

277

 

Income before income taxes

 

 

26,227

 

 

 

16,080

 

 

 

84,342

 

 

 

45,407

 

Income tax expense

 

 

5,008

 

 

 

3,661

 

 

 

16,113

 

 

 

9,637

 

Net income

 

$

21,219

 

 

$

12,419

 

 

$

68,229

 

 

$

35,770

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.60

 

 

$

0.35

 

 

$

1.94

 

 

$

1.00

 

Diluted

 

$

0.60

 

 

$

0.35

 

 

$

1.91

 

 

$

0.99

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

35,166

 

 

 

35,209

 

 

 

35,179

 

 

 

35,655

 

Diluted

 

 

35,630

 

 

 

35,410

 

 

 

35,718

 

 

 

36,101

 

 

 

 

5

 

Benchmark Electronics, Inc. and Subsidiaries

 

Condensed Consolidated Balance Sheets

(UNAUDITED)

(in thousands)

 

 

 

December 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

207,430

 

 

$

271,749

 

Accounts receivable, net

 

 

491,957

 

 

 

355,883

 

Contract assets

 

 

183,613

 

 

 

155,243

 

Inventories

 

 

727,749

 

 

 

523,240

 

Other current assets

 

 

41,400

 

 

 

42,029

 

Total current assets

 

 

1,652,149

 

 

 

1,348,144

 

Property, plant and equipment, net

 

 

211,478

 

 

 

186,666

 

Operating lease right-of-use assets

 

 

93,081

 

 

 

99,158

 

Goodwill and other, net

 

 

270,623

 

 

 

269,912

 

Total assets

 

$

2,227,331

 

 

$

1,903,880

 

 

 

 

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current installments of long-term debt and finance lease obligations

 

$

4,275

 

 

$

985

 

Accounts payable

 

 

424,272

 

 

 

426,555

 

Advance payments from customers

 

 

197,937

 

 

 

118,124

 

Accrued liabilities

 

 

122,652

 

 

 

108,718

 

Total current liabilities

 

 

749,136

 

 

 

654,382

 

Long-term debt and finance lease obligations, less current installments

 

 

320,675

 

 

 

129,289

 

Operating lease liabilities

 

 

86,687

 

 

 

90,878

 

Other long-term liabilities

 

 

44,417

 

 

 

55,529

 

Shareholders’ equity

 

 

1,026,416

 

 

 

973,802

 

Total liabilities and shareholders’ equity

 

$

2,227,331

 

 

$

1,903,880

 

 

6

 

Benchmark Electronics, Inc. and Subsidiaries

 

Condensed Consolidated Statement of Cash Flows

(in thousands)

(UNAUDITED)

 

 

 

Year Ended

 

 

 

December 31,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

68,229

 

 

$

35,770

 

Depreciation and amortization

 

 

44,252

 

 

 

44,152

 

Stock-based compensation expense

 

 

18,485

 

 

 

15,262

 

Accounts receivable, net

 

 

(135,955

)

 

 

(46,967

)

Contract assets

 

 

(28,370

)

 

 

(12,464

)

Inventories

 

 

(206,247

)

 

 

(197,867

)

Accounts payable

 

 

(16,656

)

 

 

139,952

 

Advance payments from customers

 

 

93,476

 

 

 

34,002

 

Other changes in working capital and other, net

 

 

(14,681

)

 

 

(14,462

)

Net cash used in operations

 

 

(177,467

)

 

 

(2,622

)

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Additions to property, plant and equipment and software

 

 

(46,774

)

 

 

(42,177

)

Other investing activities, net

 

 

5,600

 

 

 

302

 

Net cash used in investing activities

 

 

(41,174

)

 

 

(41,875

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Share repurchases

 

 

(9,391

)

 

 

(40,216

)

Net debt activity

 

 

194,261

 

 

 

(7,648

)

Other financing activities, net

 

 

(25,641

)

 

 

(26,088

)

Net cash provided by (used in) financing activities

 

 

159,229

 

 

 

(73,952

)

 

 

 

 

 

 

 

Effect of exchange rate changes

 

 

(4,907

)

 

 

(5,792

)

Net decrease in cash and cash equivalents and restricted cash

 

 

(64,319

)

 

 

(124,241

)

Cash and cash equivalents and restricted cash at beginning of year

 

 

271,749

 

 

 

395,990

 

Cash and cash equivalents and restricted cash at end of year

 

$

207,430

 

 

$

271,749

 

 

7

 

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,

 

 

Sept 30,

 

 

Dec 31,

 

 

Dec 31,

 

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Income from operations (GAAP)

 

$

26,946

 

 

$

25,284

 

 

$

18,635

 

 

$

90,069

 

 

$

53,062

 

Amortization of intangible assets

 

 

1,592

 

 

 

1,591

 

 

 

1,591

 

 

 

6,384

 

 

 

6,384

 

Restructuring charges and other costs

 

 

799

 

 

 

1,331

 

 

 

4,099

 

 

 

5,710

 

 

 

9,341

 

(Gain) loss on assets held for sale

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(393

)

 

 

—

 

Impairment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,358

 

Ransomware incident related costs (recovery), net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,944

)

Settlement

 

 

3,250

 

 

 

—

 

 

 

—

 

 

 

3,250

 

 

 

—

 

Customer insolvency (recovery)

 

 

—

 

 

 

(599

)

 

 

(72

)

 

 

(599

)

 

 

(425

)

Non-GAAP income from operations

 

$

32,587

 

 

$

27,607

 

 

$

24,253

 

 

$

104,421

 

 

$

68,776

 

GAAP operating margin

 

 

3.6

%

 

 

3.3

%

 

 

2.9

%

 

 

3.1

%

 

 

2.4

%

Non-GAAP operating margin

 

 

4.3

%

 

 

3.6

%

 

 

3.8

%

 

 

3.6

%

 

 

3.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit (GAAP)

 

$

72,127

 

 

$

66,750

 

 

$

62,056

 

 

$

255,235

 

 

$

205,901

 

Settlement

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Customer insolvency (recovery)

 

 

—

 

 

 

(425

)

 

 

(72

)

 

 

(425

)

 

 

(425

)

Non-GAAP gross profit

 

$

72,127

 

 

$

66,325

 

 

$

61,984

 

 

$

254,810

 

 

$

205,476

 

GAAP gross margin

 

 

9.6

%

 

 

8.7

%

 

 

9.8

%

 

 

8.8

%

 

 

9.1

%

Non-GAAP gross margin

 

 

9.6

%

 

 

8.6

%

 

 

9.8

%

 

 

8.8

%

 

 

9.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$

39,540

 

 

$

38,544

 

 

$

37,731

 

 

$

150,215

 

 

$

136,700

 

Customer recovery

 

 

—

 

 

 

174

 

 

 

—

 

 

 

174

 

 

 

—

 

Non-GAAP selling, general and administrative expenses

 

$

39,540

 

 

$

38,718

 

 

$

37,731

 

 

$

150,389

 

 

$

136,700

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

21,219

 

 

$

18,829

 

 

$

12,419

 

 

$

68,229

 

 

$

35,770

 

Amortization of intangible assets

 

 

1,592

 

 

 

1,591

 

 

 

1,591

 

 

 

6,384

 

 

 

6,384

 

Restructuring charges and other costs

 

 

799

 

 

 

1,331

 

 

 

4,099

 

 

 

5,710

 

 

 

9,341

 

(Gain) loss on assets held for sale

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(393

)

 

 

—

 

Impairment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,358

 

Ransomware incident related costs (recovery), net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,944

)

Settlement

 

 

(2,344

)

 

 

(611

)

 

 

—

 

 

 

(2,955

)

 

 

—

 

Customer insolvency (recovery)

 

 

—

 

 

 

(599

)

 

 

(72

)

 

 

(599

)

 

 

(425

)

Refinancing of Credit Facilities

 

 

—

 

 

 

—

 

 

 

276

 

 

 

—

 

 

 

276

 

Income tax adjustments(1)

 

 

(5

)

 

 

(351

)

 

 

(1,212

)

 

 

(1,644

)

 

 

(3,178

)

Non-GAAP net income

 

$

21,261

 

 

$

20,190

 

 

$

17,101

 

 

$

74,732

 

 

$

48,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (GAAP)

 

$

0.60

 

 

$

0.53

 

 

$

0.35

 

 

$

1.91

 

 

$

0.99

 

Diluted (Non-GAAP)

 

$

0.60

 

 

$

0.57

 

 

$

0.48

 

 

$

2.09

 

 

$

1.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (GAAP)

 

 

35,630

 

 

 

35,348

 

 

 

35,410

 

 

 

35,718

 

 

 

36,101

 

Diluted (Non-GAAP)

 

 

35,630

 

 

 

35,348

 

 

 

35,410

 

 

 

35,718

 

 

 

36,101

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in operations

 

$

(52,749

)

 

$

(31,208

)

 

$

(1,314

)

 

$

(177,467

)

 

$

(2,622

)

Additions to property, plant and equipment and software

 

 

(13,180

)

 

 

(8,623

)

 

 

(9,740

)

 

 

(46,774

)

 

 

(42,177

)

Free cash flow (used)

 

$

(65,929

)

 

$

(39,831

)

 

$

(11,054

)

 

$

(224,241

)

 

$

(44,799

)

 

(1)
This amount represents the tax impact of the non-GAAP adjustments using the applicable effective tax rates.

8