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Benchmark Reports Fourth Quarter and Fiscal Year 2024 Results

1. BHE's Q4 revenue was $657 million; growth in Semi-Cap and A&D. 2. Achieved 7th consecutive quarter of positive Free Cash Flow. 3. 2024 total revenue was $2.7 billion, driven by Semi-Cap and A&D strengths. 4. Q1 2025 revenue guidance set at $620-$660 million, showing cautious optimism. 5. Operating margin improved year-over-year, reflecting better financial discipline.

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Why Bullish?

Despite a slight revenue decline, BHE demonstrated growth in key sectors and consistent free cash flow, indicators of solid operational health.

How important is it?

The article outlines BHE's financial results which are crucial for investor confidence and market performance.

Why Short Term?

The market will likely react to immediate results, impacting BHE in the short term as guidance lays groundwork for upcoming performance assessments.

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BHE
TEMPE, Ariz.--(BUSINESS WIRE)--Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the fourth quarter and year ended December 31, 2024. Fourth quarter 2024 results(1): Revenue of $657 million with year-over-year growth in Semi-Cap, A&D and Industrials offset by anticipated weakness in Medical and AC&C GAAP and non-GAAP gross margin of 10.3% and 10.4% GAAP and Non-GAAP operating margin of 4.3% and 5.1% GAAP and non-GAAP earnings per share of $0.50 and $0.61 Delivered 7th consecutive quarter of positive Free Cash Flow Full year 2024 results(1): Revenue of $2.7 billion driven by strength in Semi-Cap and A&D GAAP and non-GAAP gross margin of 10.2%, up 70 and 60 basis points year-over-year GAAP and non-GAAP operating margin of 4.1% and 5.1% GAAP earnings per share of $1.72, with non-GAAP earnings of $2.29 Delivered $156 million in Free Cash Flow 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 Revenue between $620 million - $660 million Diluted GAAP earnings per share between $0.34 - $0.40 Diluted non-GAAP earnings per share between $0.48 - $0.54 Non-GAAP earnings per share guidance excludes stock-based compensation expense of approximately $4.5 million and other non-operating expenses of $2.6 million to $2.8 million which includes restructuring, amortization of intangibles and other expenses. 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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