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Classified in: Science and technology, Business, Covid-19 virus
Subjects: ERN, ERP

BENCHMARK REPORTS SECOND QUARTER 2022 RESULTS


Second quarter 2022 results:

TEMPE, Ariz., Aug. 3, 2022 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the second quarter ended June 30, 2022.



Three Months Ended




June 30,



Mar 31,



June 30,


In millions, except EPS


2022



2022



2021


Sales


$

728



$

636



$

545


Net income(2)


$

17



$

11



$

7


Net income ? non-GAAP(1)(2)


$

18



$

16



$

10


Diluted earnings per share(2)


$

0.49



$

0.31



$

0.20


Diluted EPS ? non-GAAP(1)(2)


$

0.50



$

0.44



$

0.27


Operating margin(2)



3.1

%



2.4

%



2.0

%

Operating margin ? non-GAAP(1)(2)



3.1

%



3.4

%



2.5

%

 

(1)

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

(2)

Results for the second quarter ended June 30, 2022, first quarter ended March 31, 2022, and second quarter ended June 30, 2021 include the impact of approximately $1.1 million, $1.1 million, and $0.9 million of net
COVID-19 related costs, respectively.

"The second quarter continued to demonstrate our ability to execute on our growth strategy despite ongoing supply chain challenges" said Jeff Benck, Benchmark's President and CEO.

"We were pleased with the balanced revenue contribution to our performance in the second quarter, led by the Medical, Industrials, and Computing sectors. Meanwhile, our Semi-Cap sector continues to demonstrate nice growth, with demand signals pointing to strength into 2023."

Benck continued "Our bookings performance and resulting new program introduction efforts over the last two years are leading to the successful launch of many new products. This effort, coupled with our ability to fulfill greater demand from our existing customer base, is fueling our industry leading growth. We believe these demand indicators, along with our under-sized consumer exposure, has us well positioned for continued momentum through the second half of 2022."

Cash Conversion Cycle



June 30,



Mar 31,



June 30,




2022



2022



2021


Accounts receivable days



55




54




48


Contract asset days



22




24




26


Inventory days



90




95




75


Accounts payable days



(67)




(71)




(69)


Advance payments from customers days



(23)




(20)




(16)


Cash Conversion Cycle days



77




82




64


 

Second Quarter 2022 Industry Sector Update
Revenue and percentage of sales by industry sector (in millions) was as follows.

 



June 30,



Mar 31,



June 30,


Higher-Value Markets


2022



2022



2021


Medical


$

166




23

%


$

117




18

%


$

109




20

%

Semi-Cap



175




24




183




29




139




26


A&D



90




12




82




13




97




18


Industrials



159




22




137




22




100




18




$

590




81

%


$

519




82

%


$

445




82

%






















June 30,



Mar 31,



June 30,


Traditional Markets


2022



2022



2021


Computing


$

69




10

%


$

55




8

%


$

40




7

%

Telecommunications



69




9




62




10




60




11




$

138




19

%


$

117




18

%


$

100




18

%

Total


$

728




100

%


$

636




100

%


$

545




100

%

 

Overall, higher-value market revenues were up 33% year-over-year from strength in the Industrials, Medical and Semi-Cap sectors. Traditional market revenues were up 38% year-over-year from strength in both Computing and Telecommunications sectors.

Third Quarter 2022 Guidance

Restructuring charges are expected to range between $1.6 million and $2.4 million in the third quarter and the amortization of intangibles is expected to be $1.6 million in the third quarter.

Second 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 Wednesday, August 10, 2022 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 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 third quarter 2022 results, the company's belief that it is well positioned for continued momentum through the second half of 2022 based on current demand indicators, the company's expectations regarding the strength of the Semi-Cap sector into 2023, 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, inflationary pressures, the effects of foreign currency fluctuations, 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.

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,




2022



2021



2022



2021


Sales


$

728,029



$

544,662



$

1,364,112



$

1,050,383


Cost of sales



669,273




496,749




1,247,754




960,243


Gross profit



58,756




47,913




116,358




90,140


Selling, general and administrative expenses



35,842




34,034




72,131




64,582


Amortization of intangible assets



1,592




1,599




3,201




3,197


Restructuring charges and other costs (income)



(1,110)




1,581




3,187




3,172


Ransomware incident related costs (recovery), net



?




?




?




(3,444)


Income from operations



22,432




10,699




37,839




22,633


Interest expense



(2,185)




(2,079)




(3,935)




(4,228)


Interest income



261




164




391




329


Other income, net



784




440




490




164


Income before income taxes



21,292




9,224




34,785




18,898


Income tax expense



4,071




1,855




6,604




3,612


Net income


$

17,221



$

7,369



$

28,181



$

15,286


Earnings per share:













Basic


$

0.49



$

0.21



$

0.80



$

0.42


Diluted


$

0.49



$

0.20



$

0.79



$

0.42


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













Basic



35,157




35,753




35,201




36,000


Diluted



35,336




36,061




35,616




36,474


 

Benchmark Electronics, Inc. and Subsidiaries


Condensed Consolidated Balance Sheets

(UNAUDITED)

(in thousands)




June 30,



December 31,




2022



2021


Assets







Current assets:







Cash and cash equivalents


$

262,269



$

271,749


Restricted cash



1,650




?


Accounts receivable, net



446,515




355,883


Contract assets



179,172




155,243


Inventories



666,742




523,240


Other current assets



44,924




42,029


Total current assets



1,601,272




1,348,144


Property, plant and equipment, net



198,497




186,666


Operating lease right-of-use assets



98,580




99,158


Goodwill and other, net



268,436




269,912


Total assets


$

2,166,785



$

1,903,880









Liabilities and Shareholders' Equity







Current liabilities:







Current installments of long-term debt and finance lease obligations


$

2,630



$

985


Accounts payable



500,886




426,555


Advance payments from customers



173,557




118,124


Accrued liabilities



108,005




108,718


Total current liabilities



785,078




654,382


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



262,185




129,289


Operating lease liabilities



90,936




90,878


Other long-term liabilities



42,813




55,529


Shareholders' equity



985,773




973,802


Total liabilities and shareholders' equity


$

2,166,785



$

1,903,880


 

Benchmark Electronics, Inc. and Subsidiaries


Condensed Consolidated Statement of Cash Flows

(in thousands)

(UNAUDITED)




Six Months Ended




June 30,




2022



2021


Cash flows from operating activities:







Net income


$

28,181



$

15,286


Depreciation and amortization



21,862




21,994


Stock-based compensation expense



8,487




6,863


Accounts receivable, net



(91,200)




18,959


Contract assets



(23,929)




(11,850)


Inventories



(146,178)




(88,634)


Accounts payable



69,943




92,677


Advance payments from customers



55,433




4,563


Other changes in working capital and other, net



(16,109)




(19,585)


Net cash (used in) provided by operations



(93,510)




40,273









Cash flows from investing activities:







Additions to property, plant and equipment and software



(24,971)




(18,619)


Other investing activities, net



5,657




188


Net cash used in investing activities



(19,314)




(18,431)









Cash flows from financing activities:







Share repurchases



(9,391)




(30,319)


Net debt activity



134,363




(4,543)


Other financing activities, net



(14,183)




(14,204)


Net cash provided by (used in) financing activities



110,789




(49,066)









Effect of exchange rate changes



(5,795)




1,677


Net decrease in cash and cash equivalents and restricted cash



(7,830)




(25,547)


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


$

263,919



$

370,443


 

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,




2022



2022



2021



2022



2021


Income from operations (GAAP)


$

22,432



$

15,407



$

10,699



$

37,839



$

22,633


Amortization of intangible assets



1,592




1,609




1,599




3,201




3,197


Restructuring charges and other costs



1,266




2,314




1,581




3,580




3,172


(Gain) loss on assets held for sale



(2,376)




1,983




?




(393)




?


Ransomware incident related costs (recovery),
net



?




?




?




?




(3,444)


Customer insolvency (recovery)



?




?




(153)




?




(185)


Non-GAAP income from operations


$

22,914



$

21,313



$

13,726



$

44,227



$

25,373


GAAP operating margin



3.1

%



2.4

%



2.0

%



2.8

%



2.2

%

Non-GAAP operating margin



3.1

%



3.4

%



2.5

%



3.2

%



2.4

%

















Gross Profit (GAAP)


$

58,756



$

57,602



$

47,913



$

116,358



$

90,140


Customer insolvency (recovery)



?




?




(153)




?




(185)


Non-GAAP gross profit


$

58,756



$

57,602



$

47,760



$

116,358



$

89,955


GAAP gross margin



8.1

%



9.1

%



8.8

%



8.5

%



8.6

%

Non-GAAP gross margin



8.1

%



9.1

%



8.8

%



8.5

%



8.6

%

















Selling, general and administrative expenses


$

35,842



$

36,289



$

34,034



$

72,131



$

64,582


Non-GAAP selling, general and administrative
expenses


$

35,842



$

36,289



$

34,034



$

72,131



$

64,582


















Net income (GAAP)


$

17,221



$

10,960



$

7,369



$

28,181



$

15,286


Amortization of intangible assets



1,592




1,609




1,599




3,201




3,197


Restructuring charges and other costs



1,266




2,314




1,581




3,580




3,172


(Gain) loss on assets held for sale



(2,376)




1,983




?




(393)




?


Ransomware incident related costs (recovery),
net



?




?




?




?




(3,444)


Customer insolvency (recovery)



?




?




(153)




?




(185)


Income tax adjustments(1)



(82)




(1,206)




(633)




(1,288)




(464)


Non-GAAP net income


$

17,621



$

15,660



$

9,763



$

33,281



$

17,562


















Diluted earnings per share:
















Diluted (GAAP)


$

0.49



$

0.31



$

0.20



$

0.79



$

0.42


Diluted (Non-GAAP)


$

0.50



$

0.44



$

0.27



$

0.93



$

0.48


















Weighted-average number of shares used in

calculating diluted earnings per share:
















Diluted (GAAP)



35,336




35,470




36,061




35,616




36,474


Diluted (Non-GAAP)



35,336




35,470




36,061




35,616




36,474


















Net cash (used in) provided by operations


$

(25,485)



$

(68,025)



$

3,660



$

(93,510)



$

40,273


Additions to property, plant and equipment
and software



(6,996)




(17,975)




(12,197)




(24,971)




(18,619)


Free cash flow (used)


$

(32,481)



$

(86,000)



$

(8,537)



$

(118,481)



$

21,654


 

(1)

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

 

SOURCE Benchmark Electronics, Inc.


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