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BENCHMARK REPORTS THIRD QUARTER 2023 RESULTS
Press Releases

BENCHMARK REPORTS THIRD QUARTER 2023 RESULTS

Third quarter 2023 results:

  • Revenue of $720 million
  • GAAP operating income of $30 million, up 20% year-over-year
  • Non-GAAP(1) operating income of $34 million, up 22% year-over-year
  • GAAP and non-GAAP earnings per share of $0.57

TEMPE, Ariz., Oct. 25, 2023 /PRNewswire/ — Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the third quarter ended September 30, 2023.



Three Months Ended




September 30,



June 30,



September 30,


In millions, except EPS


2023



2023



2022


Sales


$

720



$

733



$

772


Net income


$

20



$

14



$

19


Income from operations


$

30



$

24



$

25


Net income – non-GAAP(1)


$

21



$

17



$

20


Income from operations – non-GAAP(1)


$

34



$

29



$

28


Diluted earnings per share


$

0.57



$

0.39



$

0.53


Diluted EPS – non-GAAP(1)


$

0.57



$

0.48



$

0.57


Operating margin



4.2

%



3.3

%



3.3

%

Operating margin – non-GAAP(1)



4.7

%



4.0

%



3.6

%














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

“Benchmark’s strategy is to serve high-complexity growth opportunities within our targeted sectors. This focus, coupled with the team’s commitment to operational improvement, enabled us to deliver another set of strong results in the third quarter,” said Jeff Benck, Benchmark’s President and CEO. 

Benck continued “I am proud of the team’s continued execution despite the dynamic market environment. Looking forward, we remain focused on delivering continued operating leverage and believe we are well positioned to capitalize on the opportunities in front of us.”

Cash Conversion Cycle



September 30,



June 30,



September 30,




2023



2023



2022


Accounts receivable days



60




59




56


Contract asset days



24




23




22


Inventory days



100




102




95


Accounts payable days



(53)




(56)




(67)


Advance payments from customers days



(26)




(25)




(27)


Cash Conversion Cycle days



105




103




79


Third Quarter 2023 Industry Sector Update

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



September 30,



June 30,



September 30,




2023



2023



2022


Medical


$

149




21

%


$

145




20

%


$

166




21

%

Semi-Cap



165




23




164




22




186




24


A&D



100




14




80




11




86




11


Industrials



154




21




167




23




155




20


Advanced Computing



66




9




81




11




95




13


Next Gen Communications



86




12




96




13




84




11


Total


$

720




100

%


$

733




100

%


$

772




100

%

Revenue decreased quarter over quarter and year over year primarily due to a decrease in Advanced Computing of 19% and 30%, respectively, due to completion of a high performance compute program, partially offset by an increase in A&D of 24% and 16%, respectively.

Fourth Quarter 2023 Guidance

  • Revenue between $675$725 million
  • Diluted GAAP earnings per share between $0.49$0.55
  • Diluted non-GAAP earnings per share between $0.54$0.60 (excluding restructuring charges and other costs and amortization of intangibles)

Restructuring charges are expected to range between $0.8 million and $1.2 million in the fourth quarter and the amortization of intangibles is expected to be $1.2 million in the fourth quarter.

Third 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 fourth 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 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 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



Nine Months Ended




September 30,



September 30,




2023



2022



2023



2022


Sales


$

719,695



$

771,575



$

2,147,622



$

2,135,687


Cost of sales



650,618




704,825




1,947,556




1,952,579


Gross profit



69,077




66,750




200,066




183,108


Selling, general and administrative expenses



35,509




38,544




111,379




110,675


Amortization of intangible assets



1,592




1,591




4,775




4,792


Restructuring charges and other costs



1,635




1,331




6,348




4,518


Income from operations



30,341




25,284




77,564




63,123


Interest expense



(8,475)




(3,493)




(23,183)




(7,428)


Interest income



1,343




452




4,223




843


Other income, net



2,384




1,087




280




1,577


Income before income taxes



25,593




23,330




58,884




58,115


Income tax expense



5,181




4,501




12,121




11,105


Net income


$

20,412



$

18,829



$

46,763



$

47,010


Earnings per share:













Basic


$

0.57



$

0.54



$

1.32



$

1.34


Diluted


$

0.57



$

0.53



$

1.30



$

1.32


Weighted-average number of shares used in calculating

earnings per share:













Basic



35,647




35,151




35,535




35,184


Diluted



35,876




35,348




35,879




35,604


 

 

Benchmark Electronics, Inc. and Subsidiaries

 

Condensed Consolidated Balance Sheets

(UNAUDITED)

(in thousands)










September 30,



December 31,




2023



2022


Assets







Current assets:







Cash and cash equivalents


$

259,542



$

207,430


Restricted cash



1,218





Accounts receivable, net



477,685




491,957


Contract assets



190,085




183,613


Inventories



725,349




727,749


Other current assets



53,190




41,400


Total current assets



1,707,069




1,652,149


Property, plant and equipment, net



231,661




211,478


Operating lease right-of-use assets



122,104




93,081


Goodwill and other, net



272,311




270,623


Total assets


$

2,333,145



$

2,227,331









Liabilities and Shareholders’ Equity







Current liabilities:







Current installments of long-term debt


$

4,281



$

4,275


Accounts payable



382,170




424,272


Advance payments from customers



189,058




197,937


Accrued liabilities



123,595




122,652


Total current liabilities



699,104




749,136


Long-term debt, less current installments



428,231




320,675


Operating lease liabilities



114,279




86,687


Other long-term liabilities



28,482




44,417


Shareholders’ equity



1,063,049




1,026,416


Total liabilities and shareholders’ equity


$

2,333,145



$

2,227,331


 

 

Benchmark Electronics, Inc. and Subsidiaries

 

Condensed Consolidated Statement of Cash Flows

(in thousands)

(UNAUDITED)







Nine Months Ended




September 30,




2023



2022


Cash flows from operating activities:







Net income


$

46,763



$

47,010


Depreciation and amortization



34,103




32,987


Stock-based compensation expense



12,331




13,282


Accounts receivable



12,937




(123,600)


Contract assets



(6,472)




(32,487)


Inventories



1,789




(228,501)


Accounts payable



(24,420)




84,588


Advance payments from customers



(8,879)




93,476


Other changes in working capital and other, net



(30,938)




(11,472)


Net cash provided by (used in) operations



37,214




(124,717)









Cash flows from investing activities:







Additions to property, plant and equipment and software



(66,713)




(33,594)


Other investing activities, net



588




5,666


Net cash used in investing activities



(66,125)




(27,928)









Cash flows from financing activities:







Share repurchases






(9,391)


Net debt activity



107,194




169,303


Other financing activities, net



(23,306)




(20,127)


Net cash provided by financing activities



83,888




139,785









Effect of exchange rate changes



(1,647)




(9,552)


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



53,330




(22,412)


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


$

260,760



$

249,337


 

 

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,



Sept. 30,



September 30,




2023



2023



2022



2023



2022


Income from operations (GAAP)


$

30,341



$

24,481



$

25,284



$

77,564



$

63,123


Amortization of intangible assets



1,592




1,591




1,591




4,775




4,792


Restructuring charges and other costs



1,437




2,364




1,331




5,227




4,911


Gain on assets held for sale















(393)


Asset impairment



198




923







1,121





Customer insolvency (recovery)









(599)







(599)


Non-GAAP income from operations


$

33,568



$

29,359



$

27,607



$

88,687



$

71,834


GAAP operating margin



4.2

%



3.3

%



3.3

%



3.6

%



3.0

%

Non-GAAP operating margin



4.7

%



4.0

%



3.6

%



4.1

%



3.4

%

















Gross Profit (GAAP)


$

69,077



$

67,031



$

66,750



$

200,066



$

183,108


Customer insolvency (recovery)









(425)







(425)


Non-GAAP gross profit


$

69,077



$

67,031



$

66,325



$

200,066



$

182,683


GAAP gross margin



9.6

%



9.1

%



8.7

%



9.3

%



8.6

%

Non-GAAP gross margin



9.6

%



9.1

%



8.6

%



9.3

%



8.6

%

















Selling, general and administrative expenses


$

35,509



$

37,672



$

38,544



$

111,379



$

110,675


Customer insolvency (recovery)









174







174


Non-GAAP selling, general and administrative

expenses


$

35,509



$

37,672



$

38,718



$

111,379



$

110,849


















Net income (GAAP)


$

20,412



$

13,991



$

18,829



$

46,763



$

47,010


Amortization of intangible assets



1,592




1,591




1,591




4,775




4,792


Restructuring charges and other costs



1,437




2,364




1,331




5,227




4,911


Gain on assets held for sale















(393)


Asset impairment



198




923







1,121





Settlement



(3,375)




(1,155)




(611)




(4,530)




(611)


Customer insolvency (recovery)









(599)







(599)


Income tax adjustments(1)



245




(670)




(351)




(941)




(1,639)


Non-GAAP net income


$

20,509



$

17,044



$

20,190



$

52,415



$

53,471


















Diluted earnings per share:
















Diluted (GAAP)


$

0.57



$

0.39



$

0.53



$

1.30



$

1.32


Diluted (Non-GAAP)


$

0.57



$

0.48



$

0.57



$

1.46



$

1.50


















Weighted-average number of shares used in

calculating diluted earnings per share:
















Diluted (GAAP)



35,876




35,676




35,348




35,879




35,604


Diluted (Non-GAAP)



35,876




35,676




35,348




35,879




35,604


















Net cash provided by (used in) operations


$

37,583



$

24,538



$

(31,208)



$

37,214



$

(124,717)


Additions to property, plant and equipment and

software



(19,664)




(8,318)




(8,623)




(66,713)




(33,594)


Free cash flow (used)


$

17,919



$

16,220



$

(39,831)



$

(29,499)



$

(158,311)



(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-third-quarter-2023-results-301967805.html

SOURCE Benchmark Electronics, Inc.

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