PR Newswire | Apr 28, 2021 04:07PM EDT

04/28 15:07 CDT

Benchmark Reports First Quarter 2021 ResultsFirst quarter 2021 results:- Quarterly revenue of $506 million- Semi-Cap revenue growth of 37% year-over-year- Computing revenue growth of 19% year-over-year- Higher-value markets revenue mix of 80%- GAAP diluted EPS of $0.22 and non-GAAP diluted EPS of $0.21- Cash from operations of $37 million and free cash flow of $30 million TEMPE, Ariz., April 28, 2021

TEMPE, Ariz., April 28, 2021 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the first quarter ended March 31, 2021.

Three Months Ended

Mar 31, Dec 31, Mar 31,

In millions, except EPS 2021 2020 2020

Sales $ 506 $ 521 $ 515

Net income^(2) $ 8 $ 8 $ 4

Net income - non-GAAP^(1)(2) $ 8 $ 13 $ 8

Diluted earnings per share^(2) $ 0.22 $ 0.21 $ 0.10

Diluted EPS - non-GAAP^(1)(2) $ 0.21 $ 0.34 $ 0.22

Operating margin^(2) 2.4 % 2.3 % 1.3 %

Operating margin - non-GAAP^(1)(2) 2.3 % 3.4 % 2.3 %

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

^(2) Results for the first quarter ended March 31, 2021, fourth quarterended December 31, 2020 and first quarter ended March 31, 2020 include the impact of approximately $1.4 million,$1.6 million and $0.7 million of net COVID-19 related costs, respectively.

"We delivered another solid quarter of revenue, earnings, and cash generation in line with our expectations," said Jeff Benck, Benchmark's President and CEO. "We are particularly pleased with continued strength in the Semi-Cap market where revenues were up 37% year-over-year in the first quarter and are now forecasted to be up greater than 20% for the full year 2021."

Benck continued, "Overall demand across many of our market sectors is strengthening and we expect this to continue through the year. In the near-term, we are proactively working with our customers and suppliers to manage supply chain constraints. We remain focused on our strategic objectives which gives us confidence that we will grow revenue, margins, and earnings in 2021."

Cash Conversion Cycle

Mar 31, Dec 31, Mar 31,

2021 2020 2020

Accounts receivable days 49 53 56

Contract asset days 26 25 28

Inventory days 69 63 65

Accounts payable days (64) (54) (61)

Advance payments from customers days (15) (16) (7)

Cash Conversion Cycle days 65 71 81

First Quarter 2021 Industry Sector UpdateRevenue and percentage of sales by industry sector (in millions) was as follows.

Mar 31, Dec 31, Mar 31,

Higher-Value Markets 2021 2020 2020

Medical $ 109 21 % $ 111 21 % $ 118 23 %

Semi-Cap 113 22 101 20 83 16

A&D 89 18 111 21 119 23

Industrials 95 19 97 19 103 20

$ 406 80 % $ 420 81 % $ 423 82 %

Mar 31, Dec 31, Mar 31,

Traditional Markets 2021 2020 2020

Computing $ 44 9 % $ 46 9 % $ 36 7 %

Telecommunications 56 11 55 10 56 11

$ 100 20 % $ 101 19 % $ 92 18 %

Total $ 506 100 % $ 521 100 % $ 515 100 %

Overall, higher-value market revenues were down 4% year-over-year from softness in commercial aerospace (in A&D), industrials and medical elective surgeries. Traditional market revenues were up 8% year-over-year primarily from strength in the computing sector.

Second Quarter 2021 Outlook

* Revenue between $515 - $555 million * Diluted GAAP earnings per share between $0.18 - $0.24 * Diluted non-GAAP earnings per share between $0.23 - $0.29 (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 second quarter and the amortization of intangibles is expected to be $1.7 million in the second quarter.

First Quarter 2021 Earnings Conference CallThe 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, May 5, 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 StatementsThis 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 second 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 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 MeasuresManagement 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

March 31,

2021 2020

Sales $ 505,721 $ 514,964

Cost of sales 463,494 471,603

Gross profit 42,227 43,361

Selling, general and administrative expenses 30,548 31,575

Amortization of intangible assets 1,598 2,381

Restructuring charges and other costs 1,591 2,915

Ransomware incident related costs (recovery), net (3,444) -

Income from operations 11,934 6,490

Interest expense (2,149) (1,702)

Interest income 165 599

Other income (expense), net (276) (662)

Income before income taxes 9,674 4,725

Income tax expense 1,757 873

Net income $ 7,917 $ 3,852

Earnings per share:

Basic $ 0.22 $ 0.10

Diluted $ 0.22 $ 0.10

Weighted-average number of shares used in calculating

earnings per share:

Basic 36,250 36,790

Diluted 36,711 37,071

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(UNAUDITED)

(in thousands)

March 31, December 31,

2021 2020

Assets

Current assets:

Cash and cash equivalents $ 400,428 $ 390,808

Restricted cash - 5,182

Accounts receivable, net 276,287 309,331

Contract assets 148,205 142,779

Inventories 355,164 327,377

Other current assets 33,356 26,874

Total current assets 1,213,440 1,202,351

Property, plant and equipment, net 183,294 185,272

Operating lease right-of-use assets 88,915 79,966

Goodwill and other, net 275,104 276,646

Total assets $ 1,760,753 $ 1,744,235

Liabilities and Shareholders' Equity

Current liabilities:

Current installments of long-term debt and finance lease obligations $ 9,209 $ 9,161

Accounts payable 325,226 282,208

Advance payments from customers 76,833 84,122

Accrued liabilities 93,842 105,645

Total current liabilities 505,110 481,136

Long-term debt and finance lease obligations, less current installments 128,862 131,051

Operating lease liabilities 79,659 72,120

Other long-term liabilities 69,575 70,340

Shareholders' equity 977,547 989,588

Total liabilities and shareholders' equity $ 1,760,753 $ 1,744,235

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows

(in thousands)

(UNAUDITED)

Three Months Ended

March 31,

2021 2020

Cash flows from operating activities:

Net income $ 7,917 $ 3,852

Depreciation and amortization 11,055 12,192

Stock-based compensation expense 2,850 2,739

Accounts receivable, net 32,561 6,414

Contract assets (5,426) 1,099

Inventories (28,700) (23,769)

Accounts payable 42,439 14,882

Advance payments from customers (7,289) 1,785

Other changes in working capital and other, net (18,794) (22,303)

Net cash provided by (used in) operations 36,613 (3,109)

Cash flows from investing activities:

Additions to property, plant and equipment and software (6,422) (12,896)

Other investing activities, net 13 1,405

Net cash used in investing activities (6,409) (11,491)

Cash flows from financing activities:

Share repurchases (13,052) (19,329)

Net debt activity (2,255) 92,813

Other financing activities, net (8,453) (6,946)

Net cash provided by (used in) financing activities (23,760) 66,538

Effect of exchange rate changes (2,006) (4,108)

Net increase in cash and cash equivalents and restricted cash 4,438 47,830

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 year $ 400,428 $ 411,786

Benchmark Electronics, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Results

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

Three Months Ended

March 31, December 31, March 31,

2021 2020 2020

Income from operations (GAAP) $ 11,934 $ 11,857 $ 6,490

Restructuring charges and other costs 1,591 4,490 1,908

Ransomware incident related costs (recovery), net (3,444) (45) -

Impairment - - 1,007

Customer insolvency (recovery) (32) (553) -

Amortization of intangible assets 1,598 1,979 2,381

Non-GAAP income from operations $ 11,647 $ 17,728 $ 11,786

Gross Profit (GAAP) $ 42,227 $ 50,661 $ 43,361

Customer insolvency (recovery) (32) (553) -

Non-GAAP gross profit $ 42,195 $ 50,108 $ 43,361

Net income (GAAP) $ 7,917 $ 7,695 $ 3,852

Restructuring charges and other costs 1,591 4,490 1,908

Ransomware incident related costs (recovery), net (3,444) (45) -

Customer insolvency (recovery) (32) (553) -

Amortization of intangible assets 1,598 1,979 2,381

Impairment - - 1,007

Income tax adjustments^(1) 169 (1,006) (1,078)

Non-GAAP net income $ 7,799 $ 12,560 $ 8,070

Diluted earnings per share:

Diluted (GAAP) $ 0.22 $ 0.21 $ 0.10

Diluted (Non-GAAP) $ 0.21 $ 0.34 $ 0.22

Weighted-average number of shares used in

calculating diluted earnings per share:

Diluted (GAAP) 36,711 36,596 37,071

Diluted (Non-GAAP) 36,711 36,596 37,071

Net cash provided by (used in) operations $ 36,613 $ 94,823 $ (3,109)

Additions to property, plant and equipment and software (6,422) (10,417) (12,896)

Free cash flow (free cash flow used) $ 30,191 $ 84,406 $ (16,005)

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

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SOURCE Benchmark Electronics, Inc.