EX-99.1 2 bhe-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

FOR IMMEDIATE RELEASE

 

BENCHMARK REPORTS FIRST QUARTER 2022 RESULTS

 

 

First quarter 2022 results:

•
Revenue of $636 million; 26% year-over-year growth
o
Semi-Cap revenue growth of 12% quarter-over-quarter
o
Industrials revenue growth of 10% quarter-over-quarter
•
GAAP and non-GAAP gross margins of 9.1%, both up 80 basis points year-over-year
•
GAAP diluted EPS of $0.31, up 41% year-over-year
•
Non-GAAP diluted EPS of $0.44, up 110% year-over-year

 

TEMPE, AZ, April 26, 2022 – Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the first quarter ended March 31, 2022.

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

Dec 31,

 

 

March 31,

 

In millions, except EPS

 

2022

 

 

2021

 

 

2021

 

Sales

 

$

636

 

 

$

633

 

 

$

506

 

Net income(2)

 

$

11

 

 

$

12

 

 

$

8

 

Net income – non-GAAP(1)(2)

 

$

16

 

 

$

17

 

 

$

8

 

Diluted earnings per share(2)

 

$

0.31

 

 

$

0.35

 

 

$

0.22

 

Diluted EPS – non-GAAP(1)(2)

 

$

0.44

 

 

$

0.48

 

 

$

0.21

 

Operating margin(2)

 

 

2.4

%

 

 

2.9

%

 

 

2.4

%

Operating margin – non-GAAP(1)(2)

 

 

3.4

%

 

 

3.8

%

 

 

2.3

%

 

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

(2) Results for the first quarter ended March 31, 2022, fourth quarter ended December 31, 2021, and first quarter ended March 31, 2021 include the impact of approximately $1.1 million, $0.8 million, and $1.4 million of net COVID-19 related costs, respectively.

 

“Our recent first quarter again demonstrates our commitment to the core strategic imperatives we established for the Company,” said Jeff Benck, Benchmark’s President and CEO. “During the first quarter, we delivered 26% year-over-year revenue growth, and we are now at a revenue run rate well ahead of pre-pandemic levels. Supply constraints remain a challenge, but it has not prevented us from delivering on our growth strategy and driving improved earnings per share. All of this was done with an increased focus on our commitment to ESG. I am very proud to highlight our Sustainability Report, released late March, which provides a transparent progress report on our ESG journey.”



“Looking forward to the rest of 2022, we continue to see strong demand across each of our sectors, aided by the ramp of prior wins and momentum in new bookings. In support of this anticipated demand, we began strategically building inventory last year that continued through the first quarter of 2022. We believe this has us well positioned to deliver double-digit revenue growth in 2022.”

 

 

 

1

 

Cash Conversion Cycle

 

 

 

Mar 31,

 

 

Dec 31,

 

 

Mar 31,

 

 

 

2022

 

 

2021

 

 

2021

 

Accounts receivable days

 

 

54

 

 

 

51

 

 

 

49

 

Contract asset days

 

 

24

 

 

 

22

 

 

 

26

 

Inventory days

 

 

95

 

 

 

82

 

 

 

69

 

Accounts payable days

 

 

(71

)

 

 

(67

)

 

 

(64

)

Advance payments from customers days

 

 

(20

)

 

 

(19

)

 

 

(15

)

Cash Conversion Cycle days

 

 

82

 

 

 

69

 

 

 

65

 

 

First Quarter 2022 Industry Sector Update

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

 

 

 

Mar 31,

 

 

Dec 31,

 

 

Mar 31,

 

Higher-Value Markets

 

2022

 

 

2021

 

 

2021

 

Medical

 

$

117

 

 

 

18

%

 

$

127

 

 

 

20

%

 

$

109

 

 

 

21

%

Semi-Cap

 

 

183

 

 

 

29

 

 

 

163

 

 

 

26

 

 

 

113

 

 

 

22

 

A&D

 

 

82

 

 

 

13

 

 

 

95

 

 

 

15

 

 

 

89

 

 

 

18

 

Industrials

 

 

137

 

 

 

22

 

 

 

125

 

 

 

20

 

 

 

95

 

 

 

19

 

 

 

$

519

 

 

 

82

%

 

$

510

 

 

 

81

%

 

$

406

 

 

 

80

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mar 31,

 

 

Dec 31,

 

 

Mar 31,

 

Traditional Markets

 

2022

 

 

2021

 

 

2021

 

Computing

 

$

55

 

 

 

8

%

 

$

60

 

 

 

10

%

 

$

44

 

 

 

9

%

Telecommunications

 

 

62

 

 

 

10

 

 

 

63

 

 

 

9

 

 

 

56

 

 

 

11

 

 

 

$

117

 

 

 

18

%

 

$

123

 

 

 

19

%

 

$

100

 

 

 

20

%

Total

 

$

636

 

 

 

100

%

 

$

633

 

 

 

100

%

 

$

506

 

 

 

100

%

 

Overall, higher-value market revenues were up 28% year-over-year from strength in the Semi-Cap, Industrials, and Medical sectors. Traditional market revenues were up 18% year-over-year from strength in both Computing and Telecommunications sectors.

 

Second Quarter 2022 Guidance

•
Revenue between $615 - $655 million
•
Diluted GAAP earnings per share between $0.33 - $0.39
•
Diluted non-GAAP earnings per share between $0.39 - $0.45 (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.

 

Restructuring charges are expected to range between $0.8 million and $1.2 million in the first quarter and the amortization of intangibles is expected to be $1.6 million in the first quarter.

 

First Quarter 2022 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 Tuesday, May 3, 2022 on the Company's website.

 

2

 

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.

 

For More Information, Please Contact:

Paul Mansky, Investor Relations and Corporate Development

512-580-2719 or paul.mansky@bench.com

 

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 or the negative or other variations thereof. In particular, statements, express or implied, concerning the estimated financial impact of the COVID-19 pandemic, the company’s outlook and guidance for second quarter 2022 results, the company’s belief that it is well positioned to deliver double-digit revenue growth in 2022, the company’s expectations regarding demand in each of its sectors, the company’s anticipated plans and responses to the COVID-19 pandemic, 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, 2021 and in any of the company’s subsequent reports filed with the Securities and Exchange Commission. 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 the crisis and the consequences for the global economy, the company’s business and the businesses of its 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 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 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 the company as of the date of this document, and the company assumes no obligation to update.

 

3

 

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.

###

4

 

Benchmark Electronics, Inc. and Subsidiaries

 

Condensed Consolidated Statements of Income

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

Sales

 

$

636,083

 

 

$

505,721

 

Cost of sales

 

 

578,481

 

 

 

463,494

 

Gross profit

 

 

57,602

 

 

 

42,227

 

Selling, general and administrative expenses

 

 

36,289

 

 

 

30,548

 

Amortization of intangible assets

 

 

1,609

 

 

 

1,598

 

Restructuring charges and other costs

 

 

4,297

 

 

 

1,591

 

Ransomware incident related costs (recovery), net

 

 

—

 

 

 

(3,444

)

Income from operations

 

 

15,407

 

 

 

11,934

 

Interest expense

 

 

(1,750

)

 

 

(2,149

)

Interest income

 

 

130

 

 

 

165

 

Other income (expense), net

 

 

(294

)

 

 

(276

)

Income before income taxes

 

 

13,493

 

 

 

9,674

 

Income tax expense

 

 

2,533

 

 

 

1,757

 

Net income

 

$

10,960

 

 

$

7,917

 

Earnings per share:

 

 

 

 

 

 

Basic

 

$

0.31

 

 

$

0.22

 

Diluted

 

$

0.31

 

 

$

0.22

 

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

 

 

 

 

 

 

Basic

 

 

35,245

 

 

 

36,250

 

Diluted

 

 

35,470

 

 

 

36,711

 

 

 

 

5

 

Benchmark Electronics, Inc. and Subsidiaries

 

Condensed Consolidated Balance Sheets

(UNAUDITED)

(in thousands)

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

244,935

 

 

$

271,749

 

Accounts receivable, net

 

 

381,998

 

 

 

355,883

 

Contract assets

 

 

168,675

 

 

 

155,243

 

Inventories

 

 

608,347

 

 

 

523,240

 

Other current assets

 

 

47,063

 

 

 

42,029

 

Total current assets

 

 

1,451,018

 

 

 

1,348,144

 

Property, plant and equipment, net

 

 

190,526

 

 

 

186,666

 

Operating lease right-of-use assets

 

 

92,423

 

 

 

99,158

 

Goodwill and other, net

 

 

268,589

 

 

 

269,912

 

Total assets

 

$

2,002,556

 

 

$

1,903,880

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current installments of long-term debt and finance lease obligations

 

$

1,808

 

 

$

985

 

Accounts payable

 

 

457,252

 

 

 

426,555

 

Advance payments from customers

 

 

129,600

 

 

 

118,124

 

Accrued liabilities

 

 

95,805

 

 

 

108,718

 

Total current liabilities

 

 

684,465

 

 

 

654,382

 

Long-term debt and finance lease obligations, less current installments

 

 

201,510

 

 

 

129,289

 

Operating lease liabilities

 

 

85,024

 

 

 

90,878

 

Other long-term liabilities

 

 

55,152

 

 

 

55,529

 

Shareholders’ equity

 

 

976,405

 

 

 

973,802

 

Total liabilities and shareholders’ equity

 

$

2,002,556

 

 

$

1,903,880

 

 

6

 

Benchmark Electronics, Inc. and Subsidiaries

 

Condensed Consolidated Statement of Cash Flows

(in thousands)

(UNAUDITED)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

10,960

 

 

$

7,917

 

Depreciation and amortization

 

 

10,897

 

 

 

11,055

 

Stock-based compensation expense

 

 

4,206

 

 

 

2,850

 

Accounts receivable, net

 

 

(26,356

)

 

 

32,561

 

Contract assets

 

 

(13,431

)

 

 

(5,426

)

Inventories

 

 

(85,751

)

 

 

(28,700

)

Accounts payable

 

 

35,869

 

 

 

42,439

 

Advance payments from customers

 

 

34,002

 

 

 

(7,289

)

Other changes in working capital and other, net

 

 

(38,421

)

 

 

(18,794

)

Net cash (used in) provided by operations

 

 

(68,025

)

 

 

36,613

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Additions to property, plant and equipment and software

 

 

(17,975

)

 

 

(6,422

)

Other investing activities, net

 

 

1,330

 

 

 

13

 

Net cash used in investing activities

 

 

(16,645

)

 

 

(6,409

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Share repurchases

 

 

(5,482

)

 

 

(13,052

)

Net debt activity

 

 

72,959

 

 

 

(2,255

)

Other financing activities, net

 

 

(8,343

)

 

 

(8,453

)

Net cash provided by (used in) financing activities

 

 

59,134

 

 

 

(23,760

)

 

 

 

 

 

 

 

Effect of exchange rate changes

 

 

(1,278

)

 

 

(2,006

)

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

 

 

(26,814

)

 

 

4,438

 

Cash and cash equivalents and restricted cash at beginning of year

 

 

271,749

 

 

 

395,990

 

Cash and cash equivalents and restricted cash at end of period

 

$

244,935

 

 

$

400,428

 

 

7

 

Benchmark Electronics, Inc. and Subsidiaries

 

Reconciliation of GAAP to Non-GAAP Financial Results

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

 

 

 

Three Months Ended

 

 

 

Mar 31,

 

 

Dec 31,

 

 

Mar 31,

 

 

 

2022

 

 

2021

 

 

2021

 

Income from operations (GAAP)

 

$

15,407

 

 

$

18,635

 

 

$

11,934

 

Amortization of intangible assets

 

 

1,609

 

 

 

1,591

 

 

 

1,598

 

Restructuring charges and other costs

 

 

2,314

 

 

 

4,099

 

 

 

1,591

 

Loss on the sale of property, plant and equipment

 

 

1,983

 

 

 

—

 

 

 

—

 

Ransomware incident related costs (recovery), net

 

 

—

 

 

 

—

 

 

 

(3,444

)

Customer insolvency (recovery)

 

 

—

 

 

 

(72

)

 

 

(32

)

Non-GAAP income from operations

 

$

21,313

 

 

$

24,253

 

 

$

11,647

 

GAAP operating margin

 

 

2.4

%

 

 

2.9

%

 

 

2.4

%

Non-GAAP operating margin

 

 

3.4

%

 

 

3.8

%

 

 

2.3

%

 

 

 

 

 

 

 

 

 

 

Gross Profit (GAAP)

 

$

57,602

 

 

$

62,056

 

 

$

42,227

 

Customer insolvency (recovery)

 

 

—

 

 

 

(72

)

 

 

(32

)

Non-GAAP gross profit

 

$

57,602

 

 

$

61,984

 

 

$

42,195

 

GAAP gross margin

 

 

9.1

%

 

 

9.8

%

 

 

8.3

%

Non-GAAP gross margin

 

 

9.1

%

 

 

9.8

%

 

 

8.3

%

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$

36,289

 

 

$

37,731

 

 

$

30,548

 

Non-GAAP selling, general and administrative expenses

 

$

36,289

 

 

$

37,731

 

 

$

30,548

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

10,960

 

 

$

12,419

 

 

$

7,917

 

Amortization of intangible assets

 

 

1,609

 

 

 

1,591

 

 

 

1,598

 

Restructuring charges and other costs

 

 

2,314

 

 

 

4,099

 

 

 

1,591

 

Loss on the sale of property, plant and equipment

 

 

1,983

 

 

 

—

 

 

 

—

 

Ransomware incident related costs (recovery), net

 

 

—

 

 

 

—

 

 

 

(3,444

)

Customer insolvency (recovery)

 

 

—

 

 

 

(72

)

 

 

(32

)

Refinancing of credit facilities

 

 

—

 

 

 

276

 

 

 

—

 

Income tax adjustments(1)

 

 

(1,206

)

 

 

(1,212

)

 

 

169

 

Non-GAAP net income

 

$

15,660

 

 

$

17,101

 

 

$

7,799

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

Diluted (GAAP)

 

$

0.31

 

 

$

0.35

 

 

$

0.22

 

Diluted (Non-GAAP)

 

$

0.44

 

 

$

0.48

 

 

$

0.21

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Diluted (GAAP)

 

 

35,470

 

 

 

35,410

 

 

 

36,711

 

Diluted (Non-GAAP)

 

 

35,470

 

 

 

35,410

 

 

 

36,711

 

 

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by operations

 

$

(68,025

)

 

$

(1,314

)

 

$

36,613

 

Additions to property, plant and equipment and software

 

 

(17,975

)

 

 

(9,740

)

 

 

(6,422

)

Free cash flow (used)

 

$

(86,000

)

 

$

(11,054

)

 

$

30,191

 

 

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

8