TEMPE, Ariz., Oct. 30, 2024 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the third quarter ended September 30, 2024.

Benchmark Electronics (PRNewsfoto/Benchmark Electronics, Inc.)

Third quarter 2024 results(1):

  • Revenue of $658 million
  • Generated net cash provided by operations of $39 million and positive free cash flow of $29 million
  • GAAP and non-GAAP gross margin of 10.1% and 10.2%, respectively
  • GAAP and non-GAAP operating margin of 4.3% and 5.3%, respectively
  • GAAP and non-GAAP earnings per share of $0.42 and $0.57, respectively

Three Months Ended


September 30,

June 30,

September 30,

(Amounts in millions, except per share data)

2024

2024

2023

Sales

$

658

$

666

$

720

Net income

$

15

$

16

$

20

Income from operations

$

28

$

27

$

30

Net income – non-GAAP(1)

$

21

$

21

$

23

Income from operations – non-GAAP(1)

$

35

$

34

$

37

Diluted earnings per share

$

0.42

$

0.43

$

0.57

Diluted earnings per share – non-GAAP(1)

$

0.57

$

0.57

$

0.65

Operating margin

4.3

%

4.1

%

4.2

%

Operating margin – non-GAAP(1)

5.3

%

5.1

%

5.2

%

 

(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.

 

"Our third quarter results represent the 16th consecutive quarter of non-GAAP operating margin expansion on a year-over-year basis.  These results coupled with our focused working capital initiatives, has enabled us to deliver $245 million of positive free cash flow over the last 12 months," said Jeff Benck, Benchmark's President and CEO.

Benck continued "I would again like to welcome our new CFO, Bryan Schumaker, to the company. I am confident with his background and experience he will play a key role in helping drive continued operational excellence as we embark on our next phase of growth."

Cash Conversion Cycle












September 30,

June 30,

September 30,


2024

2024

2023

Accounts receivable days

51


51


60

Contract asset days

26


25


24

Inventory days

89


90


100

Accounts payable days

(54)


(52)


(53)

Advance payments from customers days

(22)


(24)


(26)

Cash conversion cycle days

90


90


105

 

Third Quarter 2024 Industry Sector Update

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

September 30,

June 30,

September 30,

(In millions)

2024

2024

2023

Semi-Cap

$

188


28

%

$

172


26

%

$

165


23

%

Complex Industrials

151


23


142


21


154


21

Medical

107


16


111


17


149


21

A&D

102


16


109


16


100


14

AC&C

110


17


132


20


152


21

Total

$

658


100

%

$

666


100

%

$

720


100

%

 

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

Fourth Quarter 2024 Guidance

  • Revenue between $640 million - $680 million
  • Diluted GAAP earnings per share between $0.40 - $0.46
  • Diluted non-GAAP earnings per share between $0.53 - $0.59
  • Non-GAAP earnings per share guidance excludes stock-based compensation expense, amortization of intangible assets and restructuring charges and other costs.

In the fourth quarter of 2024, stock-based compensation expense is expected to be $3.5 million, amortization of intangible assets is expected to be $1.2 million and restructuring and other charges are expected to be approximately $1.0 million.

Third 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 fourth 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, 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

Nine Months Ended


September 30,

September 30,


2024

2023

2024

2023

Sales

$

657,747

$

719,695

$

1,999,218

$

2,147,622

Cost of sales

591,006


650,618


1,797,119


1,947,556

Gross profit

66,741


69,077


202,099


200,066

Selling, general and administrative expenses

36,636


35,509


111,990


111,379

Amortization of intangible assets

1,205


1,592


3,613


4,775

Restructuring charges and other costs

795


1,635


5,609


6,348

Income from operations

28,105


30,341


80,887


77,564

Interest expense

(6,569)


(8,475)


(20,747)


(23,183)

Interest income

2,811


1,343


7,329


4,223

Other (expense) income, net

(3,952)


2,384


(7,452)


280

Income before income taxes

20,395


25,593


60,017


58,884

Income tax expense

5,021


5,181


15,113


12,121

Net income

$

15,374

$

20,412

$

44,904

$

46,763

Earnings per share:











Basic

$

0.43

$

0.57

$

1.25

$

1.32

Diluted

$

0.42

$

0.57

$

1.23

$

1.30

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











 Basic

36,051


35,647


35,970


35,535

 Diluted

36,629


35,876


36,469


35,879

 

Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands)
(UNAUDITED)









September 30,

December 31,


2024

2023

Assets





Current assets:





Cash and cash equivalents

$

324,423

$

277,391

Restricted cash

—


5,822

Accounts receivable, net

372,276


449,404

Contract assets

186,538


174,979

Inventories

581,901


683,801

Prepaid expenses and other current assets

43,569


44,350

Total current assets

1,508,707


1,635,747

Property, plant and equipment, net

224,164


227,698

Operating lease right-of-use assets

122,117


130,830

Goodwill and other long-term assets

294,009


280,480

Total assets

$

2,148,997

$

2,274,755







Liabilities and Shareholders' Equity





Current liabilities:





Current installments of long-term debt

$

6,751

$

4,283

Accounts payable

356,038


367,480

Advance payments from customers

145,350


204,883

Accrued liabilities

130,992


136,901

Total current liabilities

639,131


713,547

Long-term debt, net of current installments

272,000


326,674

Operating lease liabilities

114,181


123,385

Other long-term liabilities

21,009


32,064

Total liabilities

1,046,321


1,195,670

Shareholders' equity

1,102,676


1,079,085

Total liabilities and shareholders' equity

$

2,148,997

$

2,274,755

 

Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(UNAUDITED)






Nine Months Ended


September 30,


2024

2023

Cash flows from operating activities:





Net income

$

44,904

$

46,763

Depreciation and amortization

34,578


34,103

Stock-based compensation expense

10,740


12,331

Accounts receivable

76,479


12,937

Contract assets

(11,559)


(6,472)

Inventories

102,540


1,789

Accounts payable

(16,107)


(24,420)

Advance payments from customers

(59,533)


(8,879)

Other changes in working capital and other, net

(38,733)


(30,938)

Net cash provided by operating activities

143,309


37,214







Cash flows from investing activities:





Additions to property, plant and equipment and software

(24,221)


(66,713)

Other investing activities, net

483


588

Net cash used in investing activities

(23,738)


(66,125)







Cash flows from financing activities:





Share repurchases

(5,101)


—

Net debt activity

(52,596)


107,194

Other financing activities, net

(23,507)


(23,306)

Net cash (used in) provided by financing activities

(81,204)


83,888







Effect of exchange rate changes

2,843


(1,647)

Net increase in cash and cash equivalents and restricted cash

41,210


53,330

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

$

324,423

$

260,760

 

Benchmark Electronics, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Results
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)

 


Three Months Ended

Nine Months Ended


Sept 30,

June 30,

March 31,

Dec 31,

Sept 30,

Sept 30,


2024

2024

2024

2023

2023

2024

2023

Income from operations (GAAP)

$

28,105

$

27,253

$

25,529

$

32,100

$

30,341

$

80,887

$

77,564

Restructuring charges and other costs

795


1,471


3,343


2,054


1,437


5,609


5,227

Stock-based compensation expense

4,379


4,185


2,176


2,955


3,674


10,740


12,331

Amortization of intangible assets

1,205


1,204


1,204


1,204


1,592


3,613


4,775

Asset impairment

—


—


—


—


198


—


1,121

Legal and other settlement loss (gain)

367


317


855


—


—


1,539


—

Customer insolvency (recovery)

—


(316)


—


—


—


(316)


—

Non-GAAP income from operations

$

34,851

$

34,114

$

33,107

$

38,313

$

37,242

$

102,072

$

101,018

GAAP operating margin

4.3

%

4.1

%

3.8

%

4.6

%

4.2

%

4.0

%

3.6

%

Non-GAAP operating margin

5.3

%

5.1

%

4.9

%

5.5

%

5.2

%

5.1

%

4.7

%






















Gross profit (GAAP)

$

66,741

$

67,950

$

67,408

$

71,004

$

69,077

$

202,099

$

200,066

Stock-based compensation expense

413


326


426


416


420


1,165


1,239

Customer insolvency (recovery)

—


(316)


—


—


—


(316)


—

Non-GAAP gross profit

$

67,154

$

67,960

$

67,834

$

71,420

$

69,497

$

202,948

$

201,305

GAAP gross margin

10.1

%

10.2

%

10.0

%

10.3

%

9.6

%

10.1

%

9.3

%

Non-GAAP gross margin

10.2

%

10.2

%

10.0

%

10.3

%

9.7

%

10.2

%

9.4

%






















Selling, general and administrative expenses

$

36,636

$

38,022

$

37,332

$

35,646

$

35,509

$

111,990

$

111,379

Stock-based compensation expense

(3,966)


(3,859)


(1,750)


(2,539)


(3,254)


(9,575)


(11,092)

Legal and other settlement (loss) gain

(367)


(317)


(855)


—


—


(1,539)


—

Non-GAAP selling, general and administrative expenses

$

32,303

$

33,847

$

34,727

$

33,107

$

32,255

$

100,876

$

100,287






















Net income (GAAP)

$

15,374

$

15,528

$

14,002

$

17,552

$

20,412

$

44,904

$

46,763

Restructuring charges and other costs

795


1,471


3,343


2,899


1,437


5,609


5,227

Stock-based compensation expense

4,379


4,185


2,176


2,955


3,674


10,740


12,331

Amortization of intangible assets

1,205


1,204


1,204


1,204


1,592


3,613


4,775

Asset impairment

—


—


—


—


198


—


1,121

Legal and other settlement loss (gain)

367


317


855


(37)


(3,375)


1,539


(4,530)

Customer insolvency (recovery)

—


(316)


—


—


—


(316)


—

Income tax adjustments(1)

(1,406)


(1,437)


(1,393)


(1,280)


(529)


(4,236)


(3,536)

Non-GAAP net income

$

20,714

$

20,952

$

20,187

$

23,293

$

23,409

$

61,853

$

62,151






















Diluted earnings per share:




















Diluted (GAAP)

$

0.42

$

0.43

$

0.38

$

0.49

$

0.57

$

1.23

$

1.30

Diluted (Non-GAAP)

$

0.57

$

0.57

$

0.55

$

0.65

$

0.65

$

1.70

$

1.73






















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




















Diluted (GAAP)

36,629


36,497


36,401


35,956


35,876


36,469


35,879

Diluted (Non-GAAP)

36,629


36,497


36,401


35,956


35,876


36,469


35,879






















Net cash provided by operations

$

39,036

$

55,816

$

48,457

$

137,079

$

37,583

$

143,309

$

37,214

Additions to property, plant and
equipment and software

(9,814)


(8,504)


(5,903)


(11,026)


(19,664)


(24,221)


(66,713)

Free cash flow (used)

$

29,222

$

47,312

$

42,554

$

126,053

$

17,919

$

119,088

$

(29,499)

 

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

 

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SOURCE BENCHMARK ELECTRONICS

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