TEMPE, Ariz., Feb. 4, 2021 /PRNewswire/ -- Benchmark
Electronics, Inc. (NYSE: BHE) today announced financial results for
the fourth quarter and year ended December
31, 2020.
|
|
Three Months
Ended
|
|
|
|
Dec
31,
|
|
|
Sep 30,
|
|
|
Dec 31,
|
|
In millions,
except EPS
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
Sales
|
|
$
|
521
|
|
|
$
|
526
|
|
|
$
|
508
|
|
Net income
(loss)(2)
|
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
(7)
|
|
Net income –
non-GAAP(1)(2)
|
|
$
|
13
|
|
|
$
|
12
|
|
|
$
|
10
|
|
Diluted earnings
(loss) per share(2)
|
|
$
|
0.21
|
|
|
$
|
0.16
|
|
|
$
|
(0.19)
|
|
Diluted EPS –
non-GAAP(1)(2)
|
|
$
|
0.34
|
|
|
$
|
0.32
|
|
|
$
|
0.27
|
|
Operating
margin(2)
|
|
|
2.3
|
%
|
|
|
1.6
|
%
|
|
|
(1.8)
|
%
|
Operating margin –
non-GAAP(1)(2)
|
|
|
3.4
|
%
|
|
|
3.0
|
%
|
|
|
2.6
|
%
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
Dec 31,
|
|
|
Dec 31,
|
|
In millions,
except EPS
|
|
2020
|
|
|
2019
|
|
Net sales
|
|
$
|
2,053
|
|
|
$
|
2,268
|
|
Net
income(3)
|
|
$
|
14
|
|
|
$
|
23
|
|
Net income –
non-GAAP(1)(3)
|
|
$
|
35
|
|
|
$
|
51
|
|
Diluted
EPS(3)
|
|
$
|
0.38
|
|
|
$
|
0.60
|
|
Diluted EPS –
non-GAAP(1)(3)
|
|
$
|
0.95
|
|
|
$
|
1.32
|
|
Operating
margin(3)
|
|
|
1.2
|
%
|
|
|
1.3
|
%
|
Operating margin –
non-GAAP(1)(3)
|
|
|
2.5
|
%
|
|
|
3.0
|
%
|
|
|
(1)
|
A reconciliation of
GAAP and non-GAAP results is included below.
|
(2)
|
Results for the
fourth quarter ended December 31, 2020 and third quarter ended
September 30, 2020 include the impact of approximately $1.6 million
and $1.3 million of net COVID-19 related costs,
respectively.
|
(3)
|
Results for the year
ended December 31, 2020 include the impact of approximately $7.1
million of net COVID-19 related costs.
|
Jeff Benck, Benchmark's President
and CEO stated, "We closed out a very challenging year, delivering
fourth quarter results that not only met our expectations, but
demonstrated sequential improvement in both non-GAAP gross margins
at 9.6% and higher non-GAAP earnings at $0.34 enabled by higher-value sector mix and
improved utilization across the company. I am very proud of
our team, which has proven to be very resourceful and resilient in
the face of this pandemic and continues to deliver for our
customers."
Benck continued, "Our focused efforts on improving working
capital management are also bearing fruit as we generated
$95 million of operating cash flow in
the quarter and over $120 million for
the year, which exceeded our forecast. I look forward to 2021
with optimism knowing that our strategic investments in the
business to drive differentiated value and sustainability have
solidified a path to achieve revenue, margin, and earnings growth
in 2021 aligned with our mid-term financial goals."
Cash Conversion Cycle
|
|
Dec 31,
|
|
|
Sep 30,
|
|
|
Dec 31,
|
|
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
Accounts receivable
days
|
|
|
53
|
|
|
|
52
|
|
|
|
57
|
|
Contract asset
days
|
|
|
25
|
|
|
|
28
|
|
|
|
29
|
|
Inventory
days
|
|
|
63
|
|
|
|
66
|
|
|
|
60
|
|
Accounts payable
days
|
|
|
(54)
|
|
|
|
(54)
|
|
|
|
(58)
|
|
Advance payments from
customers days
|
|
|
(16)
|
|
|
|
(11)
|
|
|
|
(7)
|
|
Cash Conversion Cycle
days
|
|
|
71
|
|
|
|
81
|
|
|
|
81
|
|
Fourth Quarter 2020 Industry Sector Update
Revenue and
percentage of sales by industry sector (in millions) was as
follows.
|
Dec 31,
|
|
|
Sep 30,
|
|
|
Dec 31,
|
|
Higher-Value
Markets
|
2020
|
|
|
2020
|
|
|
2019
|
|
Medical
|
$
|
111
|
|
21
|
%
|
|
$
|
134
|
|
26
|
%
|
|
$
|
103
|
|
20
|
%
|
Semi-Cap
|
|
101
|
|
20
|
|
|
|
99
|
|
19
|
|
|
|
81
|
|
16
|
|
A&D
|
|
111
|
|
21
|
|
|
|
105
|
|
20
|
|
|
|
106
|
|
21
|
|
Industrials
|
|
97
|
|
19
|
|
|
|
86
|
|
16
|
|
|
|
107
|
|
21
|
|
|
$
|
420
|
|
81
|
%
|
|
$
|
424
|
|
81
|
%
|
|
$
|
397
|
|
78
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec 31,
|
|
|
Sep 30,
|
|
|
Dec 31,
|
|
Traditional
Markets
|
2020
|
|
|
2020
|
|
|
2019
|
|
Computing
|
$
|
46
|
|
9
|
%
|
|
$
|
44
|
|
8
|
%
|
|
$
|
45
|
|
9
|
%
|
Telecommunications
|
|
55
|
|
10
|
|
|
|
58
|
|
11
|
|
|
|
66
|
|
13
|
|
|
$
|
101
|
|
19
|
%
|
|
$
|
102
|
|
19
|
%
|
|
$
|
111
|
|
22
|
%
|
Total
|
$
|
521
|
|
100
|
%
|
|
$
|
526
|
|
100
|
%
|
|
$
|
508
|
|
100
|
%
|
Overall, higher-value market revenues were up 6% year-over-year
from strength in the Semi-Cap, Medical, and A&D sectors.
Traditional market revenues were down from program transitions.
First Quarter 2021 Outlook
- Revenue between $480 -
$520 million
- Diluted GAAP earnings per share between $0.11 - $0.14
- Diluted non-GAAP earnings per share between $0.18 - $0.22
(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. Guidance also assumes no
material changes to end market conditions due to COVID-19.
Restructuring charges are expected to range between $1.0 million and $2.0
million in the first quarter and the amortization of
intangibles is expected to be $2.0
million in the first quarter.
Fourth Quarter 2020 and CY2020 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 until Thursday, February 11, 2021 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 and Section 21E of the Securities Exchange
Act of 1934. The words "expect," "estimate," "anticipate," "could",
"predict" and similar expressions, and the negatives thereof, often
identify forward-looking statements, which are not limited to
historical facts. Forward-looking statements include, among other
things, the estimated financial impact of the COVID-19 pandemic,
our outlook and guidance for first quarter 2021 results, the
company's anticipated plans and responses to the COVID-19 pandemic,
statements (express or implied) concerning future operating results
or margins, the ability to generate sales and income or cash flow,
and expected revenue mix, and Benchmark's business and growth
strategies. Although the company believes these statements are
based on and derived from reasonable assumptions, they involve
risks and uncertainties relating to operations, markets and the
business environment generally. These statements also depend
on the duration and severity of the COVID-19 pandemic and related
risks, including government and other fourth-party responses to the
crisis and the consequences for the global economy, our business
and the businesses of our suppliers and customers. Events
relating to or resulting from the COVID-19 pandemic, including the
possibility of customer demand fluctuations, supply chain
constraints, or the ability to utilize our manufacturing facilities
at sufficient levels to cover our 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 to respond to the COVID-19 pandemic. If
one or more of these risks or uncertainties materializes, or
underlying assumptions prove incorrect, actual outcomes may vary
materially from those indicated. Readers are advised to consult
further disclosures on these risks and uncertainties, particularly
in Part 1, Item 1A, "Risk Factors" of the Company's Annual Report
on Form 10-K for the year ended December 31,
2019 and in Part II, Item 1A, "Risk Factors" in the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2020 and in its
subsequent filings with the Securities and Exchange Commission. All
forward-looking statements included in this document are based upon
information available to the company as of the date of this
document, and it assumes no obligation to update them.
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 special 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
|
|
|
Year Ended
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Sales
|
$
|
521,250
|
|
|
$
|
508,444
|
|
|
$
|
2,053,131
|
|
|
$
|
2,268,095
|
|
Cost of
sales
|
|
470,589
|
|
|
|
471,131
|
|
|
|
1,878,083
|
|
|
|
2,082,567
|
|
Gross
profit
|
|
50,661
|
|
|
|
37,313
|
|
|
|
175,048
|
|
|
|
185,528
|
|
Selling, general and
administrative expenses
|
|
32,380
|
|
|
|
34,279
|
|
|
|
122,195
|
|
|
|
126,740
|
|
Amortization of
intangible assets
|
|
1,979
|
|
|
|
2,366
|
|
|
|
9,099
|
|
|
|
9,461
|
|
Restructuring charges
and other costs
|
|
4,490
|
|
|
|
2,268
|
|
|
|
19,970
|
|
|
|
13,101
|
|
Ransomware incident
related costs (recovery), net
|
|
(45)
|
|
|
|
7,681
|
|
|
|
(1,350)
|
|
|
|
7,681
|
|
Income (loss) from
operations
|
|
11,857
|
|
|
|
(9,281)
|
|
|
|
25,134
|
|
|
|
28,545
|
|
Interest
expense
|
|
(2,175)
|
|
|
|
(1,650)
|
|
|
|
(8,364)
|
|
|
|
(6,664)
|
|
Interest
income
|
|
156
|
|
|
|
745
|
|
|
|
1,196
|
|
|
|
3,829
|
|
Other income
(expense), net
|
|
(482)
|
|
|
|
(717)
|
|
|
|
(673)
|
|
|
|
1,559
|
|
Income (loss) before
income taxes
|
|
9,356
|
|
|
|
(10,903)
|
|
|
|
17,293
|
|
|
|
27,269
|
|
Income tax
expense
|
|
1,661
|
|
|
|
(3,972)
|
|
|
|
3,238
|
|
|
|
3,844
|
|
Net income
(loss)
|
$
|
7,695
|
|
|
$
|
(6,931)
|
|
|
$
|
14,055
|
|
|
$
|
23,425
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.21
|
|
|
$
|
(0.19)
|
|
|
$
|
0.38
|
|
|
$
|
0.61
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
(0.19)
|
|
|
$
|
0.38
|
|
|
$
|
0.60
|
|
Weighted-average
number of shares used in calculating earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
36,402
|
|
|
|
36,928
|
|
|
|
36,524
|
|
|
|
38,338
|
|
Diluted
|
|
36,596
|
|
|
|
36,928
|
|
|
|
36,817
|
|
|
|
38,763
|
|
For comparative purposes, certain prior year amounts have been
reclassified to conform to the current year presentation.
Benchmark
Electronics, Inc. and Subsidiaries
|
|
Condensed
Consolidated Balance Sheets
|
(UNAUDITED)
|
(in
thousands)
|
|
|
December
31,
|
|
|
December
31,
|
|
2020
|
|
|
2019
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
390,808
|
|
|
$
|
347,558
|
Restricted
cash
|
|
5,182
|
|
|
|
16,398
|
Accounts receivable,
net
|
|
309,331
|
|
|
|
324,424
|
Contract
assets
|
|
142,779
|
|
|
|
161,061
|
Inventories
|
|
327,377
|
|
|
|
314,956
|
Other current
assets
|
|
26,874
|
|
|
|
30,685
|
Total current
assets
|
|
1,202,351
|
|
|
|
1,195,082
|
Property, plant and
equipment, net
|
|
185,272
|
|
|
|
205,819
|
Operating lease
right-of-use assets
|
|
79,966
|
|
|
|
76,859
|
Goodwill and other,
net
|
|
276,646
|
|
|
|
282,114
|
Total
assets
|
$
|
1,744,235
|
|
|
$
|
1,759,874
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Current installments
of long-term debt and finance lease obligations
|
$
|
9,161
|
|
|
$
|
8,825
|
Accounts
payable
|
|
282,208
|
|
|
|
302,994
|
Advance payments from
customers
|
|
84,122
|
|
|
|
37,511
|
Accrued
liabilities
|
|
105,645
|
|
|
|
109,915
|
Total current
liabilities
|
|
481,136
|
|
|
|
459,245
|
Long-term debt and
finance lease obligations, less current installments
|
|
131,051
|
|
|
|
138,912
|
Operating lease
liabilities
|
|
72,120
|
|
|
|
67,898
|
Other long-term
liabilities
|
|
70,340
|
|
|
|
78,987
|
Shareholders'
equity
|
|
989,588
|
|
|
|
1,014,832
|
Total liabilities and
shareholders' equity
|
$
|
1,744,235
|
|
|
$
|
1,759,874
|
Benchmark
Electronics, Inc. and Subsidiaries
|
|
Condensed
Consolidated Statement of Cash Flows
|
(in
thousands)
|
(UNAUDITED)
|
|
|
Year Ended
|
|
December
31,
|
|
2020
|
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income
|
$
|
14,055
|
|
|
$
|
23,425
|
Depreciation and
amortization
|
|
48,792
|
|
|
|
48,427
|
Stock-based
compensation expense
|
|
10,398
|
|
|
|
10,194
|
Accounts receivable,
net
|
|
13,586
|
|
|
|
134,926
|
Contract
assets
|
|
18,282
|
|
|
|
(20,979)
|
Inventories
|
|
(10,799)
|
|
|
|
(5,238)
|
Accounts
payable
|
|
(15,553)
|
|
|
|
(121,860)
|
Advance payments from
customers
|
|
46,612
|
|
|
|
9,254
|
Other changes in
working capital and other, net
|
|
(4,935)
|
|
|
|
14,987
|
Net cash provided by
operations
|
|
120,438
|
|
|
|
93,136
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Additions to property,
plant and equipment and software
|
|
(39,519)
|
|
|
|
(35,118)
|
Other investing
activities, net
|
|
5,136
|
|
|
|
255
|
Net cash used in
investing activities
|
|
(34,383)
|
|
|
|
(34,863)
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Share
repurchases
|
|
(25,220)
|
|
|
|
(122,110)
|
Net debt
activity
|
|
(7,987)
|
|
|
|
(6,794)
|
Other financing
activities, net
|
|
(24,319)
|
|
|
|
(23,933)
|
Net cash used in
financing activities
|
|
(57,526)
|
|
|
|
(152,837)
|
|
|
|
|
|
|
|
Effect of exchange
rate changes
|
|
3,505
|
|
|
|
418
|
Net increase
(decrease) in cash and cash equivalents and restricted
cash
|
|
32,034
|
|
|
|
(94,146)
|
Cash and cash
equivalents and restricted cash at beginning of year
|
|
363,956
|
|
|
|
458,102
|
Cash and cash
equivalents and restricted cash at end of year
|
$
|
395,990
|
|
|
$
|
363,956
|
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,
|
|
Dec 31,
|
|
Dec 31,
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Income (loss) from
operations (GAAP)
|
$
|
11,857
|
|
$
|
8,659
|
|
$
|
(9,281)
|
|
$
|
25,134
|
|
$
|
28,545
|
Restructuring charges
and other costs
|
|
4,490
|
|
|
1,425
|
|
|
2,268
|
|
|
13,227
|
|
|
13,101
|
Ransomware incident
related costs (recovery), net
|
|
(45)
|
|
|
(1,558)
|
|
|
7,681
|
|
|
(1,350)
|
|
|
7,681
|
Settlement
|
|
—
|
|
|
—
|
|
|
(773)
|
|
|
—
|
|
|
—
|
Impairment
|
|
—
|
|
|
5,736
|
|
|
—
|
|
|
6,743
|
|
|
—
|
Customer insolvency
(recovery)
|
|
(553)
|
|
|
(796)
|
|
|
11,036
|
|
|
(1,702)
|
|
|
8,278
|
Amortization of
intangible assets
|
|
1,979
|
|
|
2,368
|
|
|
2,366
|
|
|
9,099
|
|
|
9,461
|
Non-GAAP income from
operations
|
$
|
17,728
|
|
$
|
15,834
|
|
$
|
13,297
|
|
$
|
51,151
|
|
$
|
67,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
(GAAP)
|
$
|
50,661
|
|
$
|
46,354
|
|
$
|
37,313
|
|
$
|
175,048
|
|
$
|
185,528
|
Settlement
|
|
—
|
|
|
—
|
|
|
(773)
|
|
|
—
|
|
|
—
|
Customer insolvency
(recovery)
|
|
(553)
|
|
|
(796)
|
|
|
967
|
|
|
(1,702)
|
|
|
(73)
|
Non-GAAP gross
profit
|
$
|
50,108
|
|
$
|
45,558
|
|
$
|
37,507
|
|
$
|
173,346
|
|
$
|
185,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(GAAP)
|
$
|
7,695
|
|
$
|
5,915
|
|
$
|
(6,931)
|
|
$
|
14,055
|
|
$
|
23,425
|
Restructuring charges
and other costs
|
|
4,490
|
|
|
1,425
|
|
|
2,268
|
|
|
13,227
|
|
|
13,426
|
Ransomware incident
related costs (recovery), net
|
|
(45)
|
|
|
(1,558)
|
|
|
7,681
|
|
|
(1,350)
|
|
|
7,681
|
Customer insolvency
(recovery)
|
|
(553)
|
|
|
(796)
|
|
|
11,036
|
|
|
(1,702)
|
|
|
8,278
|
Amortization of
intangible assets
|
|
1,979
|
|
|
2,368
|
|
|
2,366
|
|
|
9,099
|
|
|
9,461
|
Settlements
|
|
—
|
|
|
—
|
|
|
(773)
|
|
|
—
|
|
|
(3,021)
|
Impairment
|
|
—
|
|
|
5,736
|
|
|
—
|
|
|
6,743
|
|
|
—
|
Income tax
adjustments(1)
|
|
(1,006)
|
|
|
(1,458)
|
|
|
(5,385)
|
|
|
(5,157)
|
|
|
(8,095)
|
Non-GAAP net
income
|
$
|
12,560
|
|
$
|
11,632
|
|
$
|
10,262
|
|
$
|
34,915
|
|
$
|
51,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
(GAAP)
|
$
|
0.21
|
|
$
|
0.16
|
|
$
|
(0.19)
|
|
$
|
0.38
|
|
$
|
0.60
|
Diluted
(Non-GAAP)
|
$
|
0.34
|
|
$
|
0.32
|
|
$
|
0.27
|
|
$
|
0.95
|
|
$
|
1.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares used in calculating diluted earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
(GAAP)
|
|
36,596
|
|
|
36,544
|
|
|
36,928
|
|
|
36,817
|
|
|
38,763
|
Diluted
(Non-GAAP)
|
|
36,596
|
|
|
36,544
|
|
|
37,374
|
|
|
36,817
|
|
|
38,763
|
|
|
(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, Inc.