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BENCHMARK REPORTS SECOND QUARTER 2023 RESULTS
Press Releases

BENCHMARK REPORTS SECOND QUARTER 2023 RESULTS

Second quarter 2023 results:

  • Revenue of $733 million
  • GAAP operating income of $24 million, up 9% year-over-year
  • Non-GAAP(1) operating income of $29 million, up 28% year-over-year
  • GAAP earnings per share of $0.39 and non-GAAP earnings per share of $0.48

TEMPE, Ariz., July 31, 2023 /PRNewswire/ — Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the second quarter ended June 30, 2023.



Three Months Ended




June 30,



Mar 31,



June 30,


In millions, except EPS


2023



2023



2022


Sales


$

733



$

695



$

728


Net income


$

14



$

12



$

17


Income from operations


$

24



$

23



$

22


Net income – non-GAAP(1)


$

17



$

15



$

18


Income from operations – non-GAAP(1)


$

29



$

26



$

23


Diluted earnings per share


$

0.39



$

0.35



$

0.49


Diluted EPS – non-GAAP(1)


$

0.48



$

0.42



$

0.50


Operating margin



3.3

%



3.3

%



3.1

%

Operating margin – non-GAAP(1)



4.0

%



3.7

%



3.1

%


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

“Benchmark delivered a strong quarter, exceeding the high end of our guidance ranges on revenue and non-GAAP operating income.  Our team’s ability to navigate continued supply chain challenges and progress on operational efficiencies enabled us to deliver these results,” said Jeff Benck, Benchmark’s President and CEO.

Benck continued “As we enter the second half, we are confident that our diversified portfolio and investments in future growth position us to both navigate the dynamic near-term macro environment and capture incremental share in tomorrow’s growth markets.”

Cash Conversion Cycle



June 30,



Mar 31,



June 30,




2023



2023



2022


Accounts receivable days



59




60




55


Contract asset days



23




25




22


Inventory days



102




111




90


Accounts payable days



(56)




(60)




(67)


Advance payments from customers days



(25)




(27)




(23)


Cash Conversion Cycle days



103




109




77


Second Quarter 2023 Industry Sector Update

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



June 30,



Mar 31,



June 30,




2023



2023



2022


Medical


$

145




20

%


$

137




20

%


$

166




23

%

Semi-Cap



164




22




149




21




175




24


A&D



80




11




79




11




90




12


Industrials



167




23




144




21




159




22


Advanced Computing



81




11




96




14




69




10


Next Gen Communications



96




13




90




13




69




9


Total


$

733




100

%


$

695




100

%


$

728




100

%

Overall, revenues were up 1% year-over-year from strength in the Industrials, Advanced Computing and Next Gen Communications sectors.

Third Quarter 2023 Guidance

  • Revenue between $680$720 million
  • Diluted GAAP earnings per share between $0.45$0.51
  • Diluted non-GAAP earnings per share between $0.51$0.59 (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 $1.1 million and $1.5 million in the third quarter and the amortization of intangibles is expected to be $1.6 million in the third quarter.

Second Quarter 2023 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: 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.

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 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, 2022, 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 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 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 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.

 

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,




2023



2022



2023



2022


Sales


$

733,232



$

728,029



$

1,427,927



$

1,364,112


Cost of sales



666,201




669,273




1,296,938




1,247,754


Gross profit



67,031




58,756




130,989




116,358


Selling, general and administrative expenses



37,672




35,842




75,870




72,131


Amortization of intangible assets



1,591




1,592




3,183




3,201


Restructuring charges and other costs (income)



3,287




(1,110)




4,713




3,187


Income from operations



24,481




22,432




47,223




37,839


Interest expense



(8,258)




(2,185)




(14,708)




(3,935)


Interest income



1,622




261




2,880




391


Other income (expense), net



61




784




(2,104)




490


Income before income taxes



17,906




21,292




33,291




34,785


Income tax expense



3,915




4,071




6,940




6,604


Net income


$

13,991



$

17,221



$

26,351



$

28,181


Earnings per share:













Basic


$

0.39



$

0.49



$

0.74



$

0.80


Diluted


$

0.39



$

0.49



$

0.74



$

0.79


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













Basic



35,618




35,157




35,478




35,201


Diluted



35,676




35,336




35,730




35,616


 

Benchmark Electronics, Inc. and Subsidiaries

 

Condensed Consolidated Balance Sheets

(UNAUDITED)

(in thousands)




June 30,



December 31,




2023



2022


Assets







Current assets:







Cash and cash equivalents


$

244,587



$

207,430


Restricted cash



743





Accounts receivable, net



484,648




491,957


Contract assets



185,877




183,613


Inventories



756,391




727,749


Other current assets



48,815




41,400


Total current assets



1,721,061




1,652,149


Property, plant and equipment, net



222,245




211,478


Operating lease right-of-use assets



92,657




93,081


Goodwill and other, net



271,500




270,623


Total assets


$

2,307,463



$

2,227,331









Liabilities and Shareholders’ Equity







Current liabilities:







Current installments of long-term debt


$

3,458



$

4,275


Accounts payable



417,406




424,272


Advance payments from customers



185,677




197,937


Accrued liabilities



115,380




122,652


Total current liabilities



721,921




749,136


Long-term debt, less current installments



423,967




320,675


Operating lease liabilities



85,343




86,687


Other long-term liabilities



28,503




44,417


Shareholders’ equity



1,047,729




1,026,416


Total liabilities and shareholders’ equity


$

2,307,463



$

2,227,331


 

Benchmark Electronics, Inc. and Subsidiaries

 

Condensed Consolidated Statement of Cash Flows

(in thousands)

(UNAUDITED)




Six Months Ended




June 30,




2023



2022


Cash flows from operating activities:







Net income


$

26,351



$

28,181


Depreciation and amortization



22,549




21,862


Stock-based compensation expense



8,657




8,487


Accounts receivable



6,359




(91,200)


Contract assets



(2,264)




(23,929)


Inventories



(28,096)




(146,178)


Accounts payable



9,499




69,943


Advance payments from customers



(12,260)




55,433


Other changes in working capital and other, net



(31,163)




(16,109)


Net cash used in operations



(368)




(93,510)









Cash flows from investing activities:







Additions to property, plant and equipment and software



(47,049)




(24,971)


Other investing activities, net



585




5,657


Net cash used in investing activities



(46,464)




(19,314)









Cash flows from financing activities:







Share repurchases






(9,391)


Net debt activity



102,237




134,363


Other financing activities, net



(17,296)




(14,183)


Net cash provided by financing activities



84,941




110,789









Effect of exchange rate changes



(209)




(5,795)


Net increase (decrease) in cash and cash equivalents and restricted cash



37,900




(7,830)


Cash and cash equivalents and restricted cash at beginning of year



207,430




271,749


Cash and cash equivalents and restricted cash at end of period


$

245,330



$

263,919


 

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,



Mar 31,



June 30,



June 30,




2023



2023



2022



2023



2022


Income from operations (GAAP)


$

24,481



$

22,742



$

22,432



$

47,223



$

37,839


Amortization of intangible assets



1,591




1,592




1,592




3,183




3,201


Restructuring charges and other costs



2,364




1,426




1,266




3,790




3,580


Gain on assets held for sale









(2,376)







(393)


Asset impairment



923










923





Non-GAAP income from operations


$

29,359



$

25,760



$

22,914



$

55,119



$

44,227


GAAP operating margin



3.3

%



3.3

%



3.1

%



3.3

%



2.8

%

Non-GAAP operating margin



4.0

%



3.7

%



3.1

%



3.9

%



3.2

%

















Gross Profit (GAAP)


$

67,031



$

63,958



$

58,756



$

130,989



$

116,358


Non-GAAP gross profit


$

67,031



$

63,958



$

58,756



$

130,989



$

116,358


GAAP gross margin



9.1

%



9.2

%



8.1

%



9.2

%



8.5

%

Non-GAAP gross margin



9.1

%



9.2

%



8.1

%



9.2

%



8.5

%

















Selling, general and administrative expenses


$

37,672



$

38,198



$

35,842



$

75,870



$

72,131


Non-GAAP selling, general and administrative expenses


$

37,672



$

38,198



$

35,842



$

75,870



$

72,131


















Net income (GAAP)


$

13,991



$

12,360



$

17,221



$

26,351



$

28,181


Amortization of intangible assets



1,591




1,592




1,592




3,183




3,201


Restructuring charges and other costs



2,364




1,426




1,266




3,790




3,580


Gain on assets held for sale









(2,376)







(393)


Asset impairment



923










923





Settlement



(1,155)










(1,155)





Income tax adjustments(1)



(670)




(516)




(82)




(1,186)




(1,288)


Non-GAAP net income


$

17,044



$

14,862



$

17,621



$

31,906



$

33,281


















Diluted earnings per share:
















Diluted (GAAP)


$

0.39



$

0.35



$

0.49



$

0.74



$

0.79


Diluted (Non-GAAP)


$

0.48



$

0.42



$

0.50



$

0.89



$

0.93


















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
















Diluted (GAAP)



35,676




35,592




35,336




35,730




35,616


Diluted (Non-GAAP)



35,676




35,592




35,336




35,730




35,616


















Net cash provided by (used in) operations


$

24,538



$

(24,906)



$

(25,485)



$

(368)



$

(93,510)


Additions to property, plant and equipment and software



(8,318)




(38,731)




(6,996)




(47,049)




(24,971)


Free cash flow (used)


$

16,220



$

(63,637)



$

(32,481)



$

(47,417)



$

(118,481)



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

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/benchmark-reports-second-quarter-2023-results-301889543.html

SOURCE Benchmark Electronics, Inc.

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