TEMPE, Ariz., July 28, 2021 /PRNewswire/ -- Benchmark
Electronics, Inc. (NYSE: BHE) today announced financial results for
the second quarter ended June 30,
2021.
|
|
Three Months
Ended
|
|
|
Jun
30,
|
|
Mar 31,
|
|
Jun 30,
|
In millions,
except EPS
|
|
2021
|
|
2021
|
|
2020
|
Sales
|
|
$
|
545
|
|
|
$
|
506
|
|
|
$
|
491
|
|
Net
income(2)
|
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
(3)
|
|
Net income –
non-GAAP(1)(2)
|
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
3
|
|
Diluted earnings per
share(2)
|
|
$
|
0.20
|
|
|
$
|
0.22
|
|
|
$
|
(0.09)
|
|
Diluted EPS –
non-GAAP(1)(2)
|
|
$
|
0.27
|
|
|
$
|
0.21
|
|
|
$
|
0.07
|
|
Operating
margin(2)
|
|
|
2.0
|
%
|
|
|
2.4
|
%
|
|
|
(0.4)
|
%
|
Operating margin –
non-GAAP(1)(2)
|
|
|
2.5
|
%
|
|
|
2.3
|
%
|
|
|
1.2
|
%
|
|
|
(1)
|
A reconciliation of
GAAP and non-GAAP results is included below.
|
(2)
|
Results for the
second quarter ended June 30, 2021 and 2020 and first quarter ended
March 31, 2021 include the impact of approximately $0.9
million, $4.1 million and $1.4 million of net COVID-19 related
costs, respectively.
|
"In the second quarter, we delivered double digit revenue growth
year-over-year from continued strength in the Semi-Cap market,
improving Industrials demand, and strength in the
Telecommunications sector," said Jeff
Benck, Benchmark's President and CEO. "Additionally,
we expanded gross and operating margins supported by our strong
revenue growth."
"I am particularly pleased with our team's execution in the
quarter given the challenges related to the global supply chain
constraints and facility disruptions in Malaysia related to the pandemic. Strong
end market demand, new program ramps, and operational execution
provide momentum for sequential growth in revenue and gross margins
through the balance of 2021."
Cash Conversion Cycle
|
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
|
2021
|
|
2021
|
|
2020
|
Accounts receivable
days
|
|
|
48
|
|
|
|
49
|
|
|
|
55
|
|
Contract asset
days
|
|
|
26
|
|
|
|
26
|
|
|
|
28
|
|
Inventory
days
|
|
|
75
|
|
|
|
69
|
|
|
|
72
|
|
Accounts payable
days
|
|
|
(69)
|
|
|
|
(64)
|
|
|
|
(61)
|
|
Advance payments from
customers days
|
|
|
(16)
|
|
|
|
(15)
|
|
|
|
(10)
|
|
Cash Conversion Cycle
days
|
|
|
64
|
|
|
|
65
|
|
|
|
84
|
|
Second Quarter 2021 Industry Sector Update
Revenue and
percentage of sales by industry sector (in millions) was as
follows.
|
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
Higher-Value
Markets
|
|
2021
|
|
2021
|
|
2020
|
Medical
|
|
$
|
109
|
|
20
|
%
|
|
$
|
109
|
|
21
|
%
|
|
$
|
135
|
|
27
|
%
|
Semi-Cap
|
|
|
139
|
|
26
|
|
|
|
113
|
|
22
|
|
|
|
87
|
|
18
|
|
A&D
|
|
|
97
|
|
18
|
|
|
|
89
|
|
18
|
|
|
|
88
|
|
18
|
|
Industrials
|
|
|
100
|
|
18
|
|
|
|
95
|
|
19
|
|
|
|
87
|
|
18
|
|
|
|
$
|
445
|
|
82
|
%
|
|
$
|
406
|
|
80
|
%
|
|
$
|
397
|
|
81
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
Traditional
Markets
|
|
2021
|
|
2021
|
|
2020
|
Computing
|
|
$
|
40
|
|
7
|
%
|
|
$
|
44
|
|
9
|
%
|
|
$
|
44
|
|
9
|
%
|
Telecommunications
|
|
|
60
|
|
11
|
|
|
|
56
|
|
11
|
|
|
|
50
|
|
10
|
|
|
|
$
|
100
|
|
18
|
%
|
|
$
|
100
|
|
20
|
%
|
|
$
|
94
|
|
19
|
%
|
Total
|
|
$
|
545
|
|
100
|
%
|
|
$
|
506
|
|
100
|
%
|
|
$
|
491
|
|
100
|
%
|
Overall, higher-value market revenues were up 9%
quarter-over-quarter and 12% year-over-year from growth in
semi-cap, industrials and A&D. Traditional market revenues were
flat quarter-over-quarter and up 7% year-over-year primarily from
growth in the telecommunications sector.
Third Quarter 2021 Outlook
- Revenue between $555 - $595 million
- Diluted GAAP earnings per share
between $0.27 - $0.35
- Diluted non-GAAP earnings per share
between $0.33 - $0.41 (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 $0.8 million and $1.2
million in the third quarter and the amortization of
intangibles is expected to be $1.7
million in the third quarter.
Second Quarter 2021 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 Wednesday, August 4,
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, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended (Exchange Act). 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 or the negative or other variations thereof. In
particular, statements, express or implied, concerning future
operating results, our ability to generate sales, income or cash
flow, the anticipated impact of the COVID-19 pandemic, the outlook
and guidance for third quarter 2021 results, our anticipated plans
and responses to the COVID-19 pandemic, our expected revenue mix,
our business strategy and strategic initiatives, our repurchases of
shares of our common stock and our intentions concerning the
payment of dividends, among others, are forward-looking statements.
Although we believe these statements are based upon reasonable
assumptions, they involve risks, uncertainties and assumptions that
are beyond our 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,
2020 and in any of our subsequent reports filed with the Securities
and Exchange Commission (SEC). In particular, these statements also
depend on the duration, severity and evolution of the COVID-19
pandemic and related risks, including the emergence and severity of
its variants, the availability of vaccines and potential hesitancy
to utilize them, government and other third-party responses to it
and the consequences for the global economy, our business and the
businesses of our suppliers and customers, as well as our ability
(or inability) to execute on our plans to respond to the COVID-19
pandemic. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual outcomes, including the future results of our 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 us as of the date of this document, and we assume no
obligation to update.
Non-GAAP Financial Measures
This document includes
certain financial measures that exclude items and therefore are not
in accordance with U.S. generally accepted accounting principles
("GAAP"). A detailed reconciliation between GAAP
results and results excluding certain items ("non-GAAP") is
included in the following tables attached to this document.
Management discloses non–GAAP information to provide investors with
additional information to analyze the Company's performance and
underlying trends. Management also uses non–GAAP measures in
order to better assess operating performance and help investors
compare results with our previous guidance. 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. 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 (Loss)
|
(Amounts in
Thousands, Except Per Share Data)
|
(UNAUDITED)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Sales
|
|
$
|
544,662
|
|
|
$
|
490,966
|
|
|
$
|
1,050,383
|
|
|
$
|
1,005,930
|
|
Cost of
sales
|
|
|
496,749
|
|
|
|
456,294
|
|
|
|
960,243
|
|
|
|
927,897
|
|
Gross
profit
|
|
|
47,913
|
|
|
|
34,672
|
|
|
|
90,140
|
|
|
|
78,033
|
|
Selling, general and
administrative expenses
|
|
|
34,034
|
|
|
|
28,516
|
|
|
|
64,582
|
|
|
|
60,091
|
|
Amortization of
intangible assets
|
|
|
1,599
|
|
|
|
2,371
|
|
|
|
3,197
|
|
|
|
4,752
|
|
Restructuring charges
and other costs
|
|
|
1,581
|
|
|
|
5,657
|
|
|
|
3,172
|
|
|
|
8,572
|
|
Ransomware incident
related costs (recovery), net
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,444)
|
|
|
|
—
|
|
Income (loss) from
operations
|
|
|
10,699
|
|
|
|
(1,872)
|
|
|
|
22,633
|
|
|
|
4,618
|
|
Interest
expense
|
|
|
(2,079)
|
|
|
|
(2,351)
|
|
|
|
(4,228)
|
|
|
|
(4,053)
|
|
Interest
income
|
|
|
164
|
|
|
|
287
|
|
|
|
329
|
|
|
|
886
|
|
Other income
(expense), net
|
|
|
440
|
|
|
|
32
|
|
|
|
164
|
|
|
|
(630)
|
|
Income (loss) before
income taxes
|
|
|
9,224
|
|
|
|
(3,904)
|
|
|
|
18,898
|
|
|
|
821
|
|
Income tax expense
(benefit)
|
|
|
1,855
|
|
|
|
(497)
|
|
|
|
3,612
|
|
|
|
376
|
|
Net income
(loss)
|
|
$
|
7,369
|
|
|
$
|
(3,407)
|
|
|
$
|
15,286
|
|
|
$
|
445
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.21
|
|
|
$
|
(0.09)
|
|
|
$
|
0.42
|
|
|
$
|
0.01
|
|
Diluted
|
|
$
|
0.20
|
|
|
$
|
(0.09)
|
|
|
$
|
0.42
|
|
|
$
|
0.01
|
|
Weighted-average
number of shares used in calculating earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
35,753
|
|
|
|
36,439
|
|
|
|
36,000
|
|
|
|
36,614
|
|
Diluted
|
|
|
36,061
|
|
|
|
36,439
|
|
|
|
36,474
|
|
|
|
36,863
|
|
Benchmark
Electronics, Inc. and Subsidiaries
|
|
Condensed
Consolidated Balance Sheets
|
(UNAUDITED)
|
(in
thousands)
|
|
|
|
June 30,
|
|
December
31,
|
|
|
2021
|
|
2020
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
369,301
|
|
|
$
|
390,808
|
|
Restricted cash
|
|
|
1,142
|
|
|
|
5,182
|
|
Accounts
receivable, net
|
|
|
290,073
|
|
|
|
309,331
|
|
Contract
assets
|
|
|
154,629
|
|
|
|
142,779
|
|
Inventories
|
|
|
415,322
|
|
|
|
327,377
|
|
Other
current assets
|
|
|
36,510
|
|
|
|
26,874
|
|
Total
current assets
|
|
|
1,266,977
|
|
|
|
1,202,351
|
|
Property, plant and
equipment, net
|
|
|
188,318
|
|
|
|
185,272
|
|
Operating lease
right-of-use assets
|
|
|
89,567
|
|
|
|
79,966
|
|
Goodwill and other,
net
|
|
|
273,929
|
|
|
|
276,646
|
|
Total
assets
|
|
$
|
1,818,791
|
|
|
$
|
1,744,235
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Current
installments of long-term debt and finance lease
obligations
|
|
$
|
9,259
|
|
|
$
|
9,161
|
|
Accounts
payable
|
|
|
380,164
|
|
|
|
282,208
|
|
Advance
payments from customers
|
|
|
88,686
|
|
|
|
84,122
|
|
Accrued
liabilities
|
|
|
103,300
|
|
|
|
105,645
|
|
Total
current liabilities
|
|
|
581,409
|
|
|
|
481,136
|
|
Long-term debt and
finance lease obligations, less current installments
|
|
|
126,639
|
|
|
|
131,051
|
|
Operating lease
liabilities
|
|
|
80,580
|
|
|
|
72,120
|
|
Other long-term
liabilities
|
|
|
62,885
|
|
|
|
70,340
|
|
Shareholders'
equity
|
|
|
967,278
|
|
|
|
989,588
|
|
Total
liabilities and shareholders' equity
|
|
$
|
1,818,791
|
|
|
$
|
1,744,235
|
|
Benchmark
Electronics, Inc. and Subsidiaries
|
|
Condensed
Consolidated Statement of Cash Flows
|
(in
thousands)
|
(UNAUDITED)
|
|
|
|
Six Months
Ended
|
|
|
June 30,
|
|
|
2021
|
|
2020
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
15,286
|
|
|
$
|
445
|
|
Depreciation and
amortization
|
|
|
21,994
|
|
|
|
24,531
|
|
Stock-based
compensation expense
|
|
|
6,863
|
|
|
|
6,044
|
|
Accounts receivable,
net
|
|
|
18,959
|
|
|
|
20,356
|
|
Contract
assets
|
|
|
(11,850)
|
|
|
|
7,420
|
|
Inventories
|
|
|
(88,634)
|
|
|
|
(48,668)
|
|
Accounts
payable
|
|
|
92,677
|
|
|
|
6,980
|
|
Advance payments from
customers
|
|
|
4,563
|
|
|
|
15,267
|
|
Other changes in
working capital and other, net
|
|
|
(19,585)
|
|
|
|
(12,457)
|
|
Net cash
provided by operations
|
|
|
40,273
|
|
|
|
19,918
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Additions to property,
plant and equipment and software
|
|
|
(18,619)
|
|
|
|
(23,290)
|
|
Other investing
activities, net
|
|
|
188
|
|
|
|
2,576
|
|
Net cash
used in investing activities
|
|
|
(18,431)
|
|
|
|
(20,714)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Share
repurchases
|
|
|
(30,319)
|
|
|
|
(19,329)
|
|
Net debt
activity
|
|
|
(4,543)
|
|
|
|
25,608
|
|
Other financing
activities, net
|
|
|
(14,204)
|
|
|
|
(12,802)
|
|
Net cash
used in financing activities
|
|
|
(49,066)
|
|
|
|
(6,523)
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes
|
|
|
1,677
|
|
|
|
(218)
|
|
Net increase in cash
and cash equivalents and restricted cash
|
|
|
(25,547)
|
|
|
|
(7,537)
|
|
Cash and cash
equivalents and restricted cash at beginning of year
|
|
|
395,990
|
|
|
|
363,956
|
|
Cash and cash
equivalents and restricted cash at end of period
|
|
$
|
370,443
|
|
|
$
|
356,419
|
|
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
|
|
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun 30,
|
|
|
2021
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Income (loss) from
operations (GAAP)
|
|
$
|
10,699
|
|
|
$
|
11,934
|
|
|
$
|
(1,872)
|
|
|
$
|
22,633
|
|
|
$
|
4,618
|
|
Restructuring charges
and other costs
|
|
|
1,581
|
|
|
|
1,591
|
|
|
|
5,657
|
|
|
|
3,172
|
|
|
|
7,565
|
|
Ransomware incident
related costs (recovery), net
|
|
|
—
|
|
|
|
(3,444)
|
|
|
|
—
|
|
|
|
(3,444)
|
|
|
|
—
|
|
Impairment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,007
|
|
Customer insolvency
(recovery)
|
|
|
(153)
|
|
|
|
(32)
|
|
|
|
(353)
|
|
|
|
(185)
|
|
|
|
(353)
|
|
Amortization of
intangible assets
|
|
|
1,599
|
|
|
|
1,598
|
|
|
|
2,371
|
|
|
|
3,197
|
|
|
|
4,752
|
|
Non-GAAP income from
operations
|
|
$
|
13,726
|
|
|
$
|
11,647
|
|
|
$
|
5,803
|
|
|
$
|
25,373
|
|
|
$
|
17,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
(GAAP)
|
|
$
|
47,913
|
|
|
$
|
42,227
|
|
|
$
|
34,672
|
|
|
$
|
90,140
|
|
|
$
|
78,033
|
|
Customer insolvency
(recovery)
|
|
|
(153)
|
|
|
|
(32)
|
|
|
|
(353)
|
|
|
|
(185)
|
|
|
|
(353)
|
|
Non-GAAP gross
profit
|
|
$
|
47,760
|
|
|
$
|
42,195
|
|
|
$
|
34,319
|
|
|
$
|
89,955
|
|
|
$
|
77,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses (GAAP)
|
|
$
|
34,034
|
|
|
$
|
30,548
|
|
|
$
|
28,516
|
|
|
$
|
64,582
|
|
|
$
|
60,091
|
|
Non-GAAP selling,
general and administrative expenses
|
|
$
|
34,034
|
|
|
$
|
30,548
|
|
|
$
|
28,516
|
|
|
$
|
64,582
|
|
|
$
|
60,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(GAAP)
|
|
$
|
7,369
|
|
|
$
|
7,917
|
|
|
$
|
(3,407)
|
|
|
$
|
15,286
|
|
|
$
|
445
|
|
Restructuring charges
and other costs
|
|
|
1,581
|
|
|
|
1,591
|
|
|
|
5,657
|
|
|
|
3,172
|
|
|
|
7,565
|
|
Ransomware incident
related costs (recovery), net
|
|
|
—
|
|
|
|
(3,444)
|
|
|
|
—
|
|
|
|
(3,444)
|
|
|
|
—
|
|
Customer insolvency
(recovery)
|
|
|
(153)
|
|
|
|
(32)
|
|
|
|
(353)
|
|
|
|
(185)
|
|
|
|
(353)
|
|
Amortization of
intangible assets
|
|
|
1,599
|
|
|
|
1,598
|
|
|
|
2,371
|
|
|
|
3,197
|
|
|
|
4,752
|
|
Impairment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,007
|
|
Income tax
adjustments(1)
|
|
|
(633)
|
|
|
|
169
|
|
|
|
(1,584)
|
|
|
|
(464)
|
|
|
|
(2,623)
|
|
Non-GAAP net
income
|
|
$
|
9,763
|
|
|
$
|
7,799
|
|
|
$
|
2,684
|
|
|
$
|
17,562
|
|
|
$
|
10,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
(GAAP)
|
|
$
|
0.20
|
|
|
$
|
0.22
|
|
|
$
|
(0.09)
|
|
|
$
|
0.42
|
|
|
$
|
0.01
|
|
Diluted
(Non-GAAP)
|
|
$
|
0.27
|
|
|
$
|
0.21
|
|
|
$
|
0.07
|
|
|
$
|
0.48
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares used in calculating diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
(GAAP)
|
|
|
36,061
|
|
|
|
36,711
|
|
|
|
36,439
|
|
|
|
36,474
|
|
|
|
36,863
|
|
Diluted
(Non-GAAP)
|
|
|
36,061
|
|
|
|
36,711
|
|
|
|
36,689
|
|
|
|
36,474
|
|
|
|
36,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operations
|
|
$
|
3,660
|
|
|
$
|
36,613
|
|
|
$
|
23,027
|
|
|
$
|
40,273
|
|
|
$
|
19,918
|
|
Additions to
property, plant and equipment and software
|
|
|
(12,197)
|
|
|
|
(6,422)
|
|
|
|
(10,394)
|
|
|
|
(18,619)
|
|
|
|
(23,290)
|
|
Free cash flow (free
cash flow used)
|
|
$
|
(8,537)
|
|
|
$
|
30,191
|
|
|
$
|
12,633
|
|
|
$
|
21,654
|
|
|
$
|
(3,372)
|
|
|
|
(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.