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

 

Exhibit 99.1

FOR IMMEDIATE RELEASE

 

BENCHMARK REPORTS SECOND QUARTER 2024 RESULTS

 

TEMPE, AZ, July 30, 2024 – Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the second quarter ended June 30, 2024. Additionally, the company’s Board of Directors have authorized an increase in the quarterly dividend from $0.165 to $0.17 per share, effective immediately.

 

Second quarter 2024 results(1):

•
Revenue of $666 million
•
Generated net cash provided by operations of $56 million and positive free cash flow of $47 million
•
GAAP and non-GAAP gross margin of 10.2%
•
GAAP and non-GAAP operating margin of 4.1% and 5.1%, respectively
•
GAAP and non-GAAP earnings per share of $0.43 and $0.57, respectively

 

 

 

Three Months Ended

 

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

(Amounts in millions, except per share data)

 

2024

 

 

2024

 

 

2023

 

Sales

 

$

666

 

 

$

676

 

 

$

733

 

Net income

 

$

16

 

 

$

14

 

 

$

14

 

Income from operations

 

$

27

 

 

$

26

 

 

$

24

 

Net income – non-GAAP(1)

 

$

21

 

 

$

20

 

 

$

20

 

Income from operations – non-GAAP(1)

 

$

34

 

 

$

33

 

 

$

33

 

Diluted earnings per share

 

$

0.43

 

 

$

0.38

 

 

$

0.39

 

Diluted earnings per share – non-GAAP(1)

 

$

0.57

 

 

$

0.55

 

 

$

0.56

 

Operating margin

 

 

4.1

%

 

 

3.8

%

 

 

3.3

%

Operating margin – non-GAAP(1)

 

 

5.1

%

 

 

4.9

%

 

 

4.5

%

(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.

 

“Once again Benchmark delivered solid results, demonstrating consistent progress toward achieving our longer-term operational objectives,” said Jeff Benck, Benchmark’s President and CEO.

 

Benck continued “While market uncertainty persists across a number of our sectors, we remain focused on executing for our customers while protecting margins, driving down inventories and delivering positive free cash flow, which we now expect to exceed $120 million in fiscal year 2024.”

 

Cash Conversion Cycle

 

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

 

 

2024

 

 

2024

 

 

2023

 

Accounts receivable days

 

 

51

 

 

 

56

 

 

 

59

 

Contract asset days

 

 

25

 

 

 

24

 

 

 

23

 

Inventory days

 

 

90

 

 

 

94

 

 

 

102

 

Accounts payable days

 

 

(52

)

 

 

(52

)

 

 

(56

)

Advance payments from customers days

 

 

(24

)

 

 

(28

)

 

 

(25

)

Cash conversion cycle days

 

 

90

 

 

 

94

 

 

 

103

 

 

1

 

Second Quarter 2024 Industry Sector Update

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

 

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

(In millions)

 

2024

 

 

2024

 

 

2023

 

Semi-Cap

 

$

172

 

 

 

26

%

 

$

166

 

 

 

25

%

 

$

164

 

 

 

22

%

Complex Industrials

 

 

142

 

 

 

21

%

 

 

141

 

 

 

21

%

 

 

167

 

 

 

23

%

Medical

 

 

111

 

 

 

17

%

 

 

115

 

 

 

17

%

 

 

145

 

 

 

20

%

A&D

 

 

109

 

 

 

16

%

 

 

106

 

 

 

16

%

 

 

80

 

 

 

11

%

AC&C

 

 

132

 

 

 

20

%

 

 

148

 

 

 

21

%

 

 

177

 

 

 

24

%

Total

 

$

666

 

 

 

100

%

 

$

676

 

 

 

100

%

 

$

733

 

 

 

100

%

 

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

 

Third Quarter 2024 Guidance

•
Revenue between $630 million - $670 million
•
Diluted GAAP earnings per share between $0.36 - $0.42
•
Diluted non-GAAP earnings per share between $0.52 - $0.58
•
Non-GAAP earnings per share guidance excludes stock-based compensation expense, restructuring charges and other costs, and amortization of intangible assets.

 

In the third quarter of 2024, restructuring charges are expected to be approximately $1.0 million, stock-based compensation expense is expected to be $4.5 million and the amortization of intangible assets is expected to be $1.2 million.

 

Second 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.

 

For More Information, Please Contact:

Paul Mansky, Investor Relations and Corporate Development

1-623-300-7052 or paul.mansky@bench.com

 

2

 

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 third quarter and fiscal year 2024 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 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, 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.

 

 

###

3

 

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Sales

 

$

665,896

 

 

$

733,232

 

 

$

1,341,471

 

 

$

1,427,927

 

Cost of sales

 

 

597,946

 

 

 

666,201

 

 

 

1,206,113

 

 

 

1,296,938

 

Gross profit

 

 

67,950

 

 

 

67,031

 

 

 

135,358

 

 

 

130,989

 

Selling, general and administrative expenses

 

 

38,022

 

 

 

37,672

 

 

 

75,354

 

 

 

75,870

 

Amortization of intangible assets

 

 

1,204

 

 

 

1,591

 

 

 

2,408

 

 

 

3,183

 

Restructuring charges and other costs

 

 

1,471

 

 

 

3,287

 

 

 

4,814

 

 

 

4,713

 

Income from operations

 

 

27,253

 

 

 

24,481

 

 

 

52,782

 

 

 

47,223

 

Interest expense

 

 

(6,933

)

 

 

(8,258

)

 

 

(14,178

)

 

 

(14,708

)

Interest income

 

 

2,526

 

 

 

1,622

 

 

 

4,518

 

 

 

2,880

 

Other (expense) income, net

 

 

(2,323

)

 

 

61

 

 

 

(3,500

)

 

 

(2,104

)

Income before income taxes

 

 

20,523

 

 

 

17,906

 

 

 

39,622

 

 

 

33,291

 

Income tax expense

 

 

4,995

 

 

 

3,915

 

 

 

10,092

 

 

 

6,940

 

Net income

 

$

15,528

 

 

$

13,991

 

 

$

29,530

 

 

$

26,351

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.43

 

 

$

0.39

 

 

$

0.82

 

 

$

0.74

 

Diluted

 

$

0.43

 

 

$

0.39

 

 

$

0.81

 

 

$

0.74

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 Basic

 

 

36,047

 

 

 

35,618

 

 

 

35,929

 

 

 

35,478

 

 Diluted

 

 

36,497

 

 

 

35,676

 

 

 

36,388

 

 

 

35,730

 

 

 

4

 

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In Thousands)

(UNAUDITED)

 

 

 

June 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

309,287

 

 

$

277,391

 

Restricted cash

 

 

578

 

 

 

5,822

 

Accounts receivable, net

 

 

376,568

 

 

 

449,404

 

Contract assets

 

 

182,090

 

 

 

174,979

 

Inventories

 

 

599,842

 

 

 

683,801

 

Prepaid expenses and other current assets

 

 

42,286

 

 

 

44,350

 

Total current assets

 

 

1,510,651

 

 

 

1,635,747

 

Property, plant and equipment, net

 

 

225,888

 

 

 

227,698

 

Operating lease right-of-use assets

 

 

125,082

 

 

 

130,830

 

Goodwill and other long-term assets

 

 

293,118

 

 

 

280,480

 

Total assets

 

$

2,154,739

 

 

$

2,274,755

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current installments of long-term debt

 

$

5,928

 

 

$

4,283

 

Accounts payable

 

 

346,153

 

 

 

367,480

 

Advance payments from customers

 

 

157,156

 

 

 

204,883

 

Accrued liabilities

 

 

133,823

 

 

 

136,901

 

Total current liabilities

 

 

643,060

 

 

 

713,547

 

Long-term debt, net of current installments

 

 

283,559

 

 

 

326,674

 

Operating lease liabilities

 

 

116,637

 

 

 

123,385

 

Other long-term liabilities

 

 

16,379

 

 

 

32,064

 

Total liabilities

 

 

1,059,635

 

 

 

1,195,670

 

Shareholders’ equity

 

 

1,095,104

 

 

 

1,079,085

 

Total liabilities and shareholders’ equity

 

$

2,154,739

 

 

$

2,274,755

 

 

5

 

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(UNAUDITED)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

29,530

 

 

$

26,351

 

Depreciation and amortization

 

 

23,026

 

 

 

22,549

 

Stock-based compensation expense

 

 

6,361

 

 

 

8,657

 

Accounts receivable

 

 

71,346

 

 

 

6,359

 

Contract assets

 

 

(7,111

)

 

 

(2,264

)

Inventories

 

 

82,717

 

 

 

(28,096

)

Accounts payable

 

 

(25,550

)

 

 

9,499

 

Advance payments from customers

 

 

(47,727

)

 

 

(12,260

)

Other changes in working capital and other, net

 

 

(28,318

)

 

 

(31,163

)

Net cash provided by (used in) operating activities

 

 

104,274

 

 

 

(368

)

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Additions to property, plant and equipment and software

 

 

(14,407

)

 

 

(47,049

)

Other investing activities, net

 

 

(1,405

)

 

 

585

 

Net cash used in investing activities

 

 

(15,812

)

 

 

(46,464

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Net debt activity

 

 

(41,731

)

 

 

102,237

 

Other financing activities, net

 

 

(17,161

)

 

 

(17,296

)

Net cash (used in) provided by financing activities

 

 

(58,892

)

 

 

84,941

 

 

 

 

 

 

 

Effect of exchange rate changes

 

 

(2,918

)

 

 

(209

)

Net increase in cash and cash equivalents and restricted cash

 

 

26,652

 

 

 

37,900

 

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 period

 

$

309,865

 

 

$

245,330

 

 

6

 

Benchmark Electronics, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Results

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

 

2024

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Income from operations (GAAP)

 

$

27,253

 

 

$

25,529

 

 

$

24,481

 

 

$

52,782

 

 

$

47,223

 

Restructuring charges and other costs

 

 

1,471

 

 

 

3,343

 

 

 

2,364

 

 

 

4,814

 

 

 

3,790

 

Stock-based compensation expense

 

 

4,185

 

 

 

2,176

 

 

 

3,867

 

 

 

6,361

 

 

 

8,657

 

Amortization of intangible assets

 

 

1,204

 

 

 

1,204

 

 

 

1,591

 

 

 

2,408

 

 

 

3,183

 

Asset impairment

 

 

—

 

 

 

—

 

 

 

923

 

 

 

—

 

 

 

923

 

Legal and other settlement loss (gain)

 

 

317

 

 

 

855

 

 

 

—

 

 

 

1,172

 

 

 

—

 

Customer insolvency (recovery)

 

 

(316

)

 

 

—

 

 

 

—

 

 

 

(316

)

 

 

—

 

Non-GAAP income from operations

 

$

34,114

 

 

$

33,107

 

 

$

33,226

 

 

$

67,221

 

 

$

63,776

 

GAAP operating margin

 

 

4.1

%

 

 

3.8

%

 

 

3.3

%

 

 

3.9

%

 

 

3.3

%

Non-GAAP operating margin

 

 

5.1

%

 

 

4.9

%

 

 

4.5

%

 

 

5.0

%

 

 

4.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (GAAP)

 

$

67,950

 

 

$

67,408

 

 

$

67,031

 

 

$

135,358

 

 

$

130,989

 

Stock-based compensation expense

 

 

326

 

 

 

426

 

 

 

423

 

 

 

752

 

 

 

819

 

Customer insolvency (recovery)

 

 

(316

)

 

 

—

 

 

 

—

 

 

 

(316

)

 

 

—

 

Non-GAAP gross profit

 

$

67,960

 

 

$

67,834

 

 

$

67,454

 

 

$

135,794

 

 

$

131,808

 

GAAP gross margin

 

 

10.2

%

 

 

10.0

%

 

 

9.1

%

 

 

10.1

%

 

 

9.2

%

Non-GAAP gross margin

 

 

10.2

%

 

 

10.0

%

 

 

9.2

%

 

 

10.1

%

 

 

9.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$

38,022

 

 

$

37,332

 

 

$

37,672

 

 

$

75,354

 

 

$

75,870

 

Stock-based compensation expense

 

 

(3,858

)

 

 

(1,750

)

 

 

(3,444

)

 

 

(5,608

)

 

 

(7,838

)

Legal and other settlement (loss) gain

 

 

(317

)

 

 

(855

)

 

 

—

 

 

 

(1,172

)

 

 

—

 

Non-GAAP selling, general and administrative expenses

 

$

33,847

 

 

$

34,727

 

 

$

34,228

 

 

$

68,574

 

 

$

68,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

15,528

 

 

$

14,002

 

 

$

13,991

 

 

$

29,530

 

 

$

26,351

 

Restructuring charges and other costs

 

 

1,471

 

 

 

3,343

 

 

 

2,364

 

 

 

4,814

 

 

 

3,790

 

Stock-based compensation expense

 

 

4,185

 

 

 

2,176

 

 

 

3,867

 

 

 

6,361

 

 

 

8,657

 

Amortization of intangible assets

 

 

1,204

 

 

 

1,204

 

 

 

1,591

 

 

 

2,408

 

 

 

3,183

 

Asset impairment

 

 

—

 

 

 

—

 

 

 

923

 

 

 

—

 

 

 

923

 

Legal and other settlement loss (gain)

 

 

317

 

 

 

855

 

 

 

(1,155

)

 

 

1,172

 

 

 

(1,155

)

Customer insolvency (recovery)

 

 

(316

)

 

 

—

 

 

 

—

 

 

 

(316

)

 

 

—

 

Income tax adjustments(1)

 

 

(1,437

)

 

 

(1,393

)

 

 

(1,484

)

 

 

(2,830

)

 

 

(3,007

)

Non-GAAP net income

 

$

20,952

 

 

$

20,187

 

 

$

20,097

 

 

$

41,139

 

 

$

38,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (GAAP)

 

$

0.43

 

 

$

0.38

 

 

$

0.39

 

 

$

0.81

 

 

$

0.74

 

Diluted (Non-GAAP)

 

$

0.57

 

 

$

0.55

 

 

$

0.56

 

 

$

1.13

 

 

$

1.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (GAAP)

 

 

36,497

 

 

 

36,401

 

 

 

35,676

 

 

 

36,388

 

 

 

35,730

 

Diluted (Non-GAAP)

 

 

36,497

 

 

 

36,401

 

 

 

35,676

 

 

 

36,388

 

 

 

35,730

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operations

 

$

55,816

 

 

$

48,457

 

 

$

24,538

 

 

$

104,274

 

 

$

(368

)

Additions to property, plant and
   equipment and software

 

 

(8,504

)

 

 

(5,903

)

 

 

(8,318

)

 

 

(14,407

)

 

 

(47,049

)

Free cash flow (used)

 

$

47,312

 

 

$

42,554

 

 

$

16,220

 

 

$

89,867

 

 

$

(47,417

)

 

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

7