BENCHMARK REPORTS RECORD FISCAL YEAR 2022 RESULTS

Rhea-AI Summary

Benchmark Electronics reported fourth quarter 2022 revenue of $751 million, up 19% year-over-year. GAAP operating income rose 45%, leading to a GAAP diluted EPS of $0.60, reflecting a 71% increase compared to the previous year. For the full year, revenue reached $2,886 million, a 28% increase, with notable growth in Advanced Computing and Next Gen Communications at 45%. The company reported a GAAP diluted EPS of $1.91 for 2022, up 93%. Looking ahead, Q1 2023 guidance estimates revenue between $640 and $680 million with EPS projections of $0.35 to $0.40.

Positive

• Fourth quarter revenue of $751 million, 19% YoY growth.
• GAAP diluted EPS of $0.60, 71% increase YoY.
• Full year revenue of $2,886 million, 28% growth.
• Advanced Computing and Next Gen Communications revenue growth of 45% YoY.

Negative

• Fourth quarter revenue declined from $772 million in Q3 2022 to $751 million.

Fourth quarter 2022 results:

• Revenue of $751 million, up 19% year-over-year
• GAAP operating income up 45% year-over-year
• Non-GAAP operating income up 34% year-over-year
• GAAP diluted EPS of $0.60, up 71% year-over-year
• Non-GAAP diluted EPS of $0.60, up 25% year-over-year

Full year 2022 results:

• Revenue of $2,886 million; 28% year-over-year growth
• Advanced Computing and Next Gen Communications combined revenue growth of 45% year-over-year
• Industrials revenue growth of 39% year-over-year
• Medical revenue growth of 28% year-over-year
• Semi-Cap revenue growth of 31% year-over-year
• GAAP operating income up 70% year-over-year
• Non-GAAP operating income up 52% year-over-year
• GAAP diluted EPS of $1.91, up 93% year-over-year
• Non-GAAP diluted EPS of $2.09, up 55% year-over-year

TEMPE, Ariz.,  Feb. 1, 2023 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the fourth quarter and year ended December 31, 2022.

		Three Months Ended
		Dec 31,				Sept 30,				Dec 31,
In millions, except EPS		2022				2022				2021
Sales		$	751			$	772			$	633
Net income		$	21			$	19			$	12
Net income – non-GAAP(1)		$	21			$	20			$	17
Diluted earnings per share		$	0.60			$	0.53			$	0.35
Diluted EPS – non-GAAP(1)		$	0.60			$	0.57			$	0.48
Operating margin			3.6	%			3.3	%			2.9	%
Operating margin – non-GAAP(1)			4.3	%			3.6	%			3.8	%

 

		Year Ended
		Dec 31,				Dec 31,
In millions, except EPS		2022				2021
Sales		$	2,886			$	2,255
Net income		$	68			$	36
Net income – non-GAAP(1)		$	75			$	49
Diluted EPS		$	1.91			$	0.99
Diluted EPS – non-GAAP(1)		$	2.09			$	1.35
Operating margin			3.1	%			2.4	%
Operating margin – non-GAAP(1)			3.6	%			3.0	%

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

"As we close out 2022, I'm proud to see the team's continued execution of our strategy which culminated in our reporting a record year of revenue and earnings," said Jeff Benck, Benchmark's President and CEO. "These results enabled us to exceed the operating targets we laid out more than two years ago, despite the unforeseen global challenges we encountered during this period."

Benck continued "Looking forward, we have a new set of objectives, which we introduced at our analyst meeting last November. I am as confident today as I was then in our ability to deliver to our commitments, or better, over the multi-year period." 

Cash Conversion Cycle

		Dec 31,				Sept 30,				Dec 31,
		2022				2022				2021
Accounts receivable days			59				56				51
Contract asset days			22				22				22
Inventory days			97				95				82
Accounts payable days			(56)				(67)				(67)
Advance payments from customers days			(26)				(27)				(19)
Cash conversion cycle days			96				79				69

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

		Dec 31,								Sept 30,								Dec 31,
		2022								2022								2021
Medical		$	144				19	%		$	166				21	%		$	127				20	%
Semi-Cap			178				24				186				24				163				26
A&D			90				12				86				11				95				15
Industrials			143				19				155				20				125				20
Advanced Computing			92				12				95				13				60				9
Next Gen Communications			104				14				84				11				63				10
Total		$	751				100	%		$	772				100	%		$	633				100	%

Overall, revenues were up 19% year-over-year from strength in the Next Gen Communications, Advanced Computing, Industrials, Medical and Semi-Cap sectors.

First Quarter 2023 Guidance

• Revenue between $640 - $680 million
• Diluted GAAP earnings per share between $0.35 - $0.40
• 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.

Restructuring charges are expected to range between $0.2 million and $0.6 million in the first quarter and the amortization of intangibles is expected to be $1.6 million in the first quarter.

Fourth 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 for one year 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 of 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 first quarter and fiscal year 2023 results, 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 the possibility of customer demand fluctuations, supply chain constraints, continued inflationary pressures, the effects of foreign currency fluctuations and high interest rates, geopolitical uncertainties including trade restrictions, 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. 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								Year Ended
		December 31,								December 31,
		2022				2021				2022				2021
Sales		$	750,644			$	633,054			$	2,886,331			$	2,255,319
Cost of sales			678,517				570,998				2,631,096				2,049,418
Gross profit			72,127				62,056				255,235				205,901
Selling, general and administrative expenses			39,540				37,731				150,215				136,700
Amortization of intangible assets			1,592				1,591				6,384				6,384
Restructuring charges and other costs			4,049				4,099				8,567				13,699
Ransomware incident related costs (recovery), net			—				—				—				(3,944)
Income from operations			26,946				18,635				90,069				53,062
Interest expense			(5,466)				(2,257)				(12,894)				(8,472)
Interest income			887				89				1,730				540
Other income (expense), net			3,860				(387)				5,437				277
Income before income taxes			26,227				16,080				84,342				45,407
Income tax expense			5,008				3,661				16,113				9,637
Net income		$	21,219			$	12,419			$	68,229			$	35,770
Earnings per share:
Basic		$	0.60			$	0.35			$	1.94			$	1.00
Diluted		$	0.60			$	0.35			$	1.91			$	0.99
Weighted-average number of shares used in calculating earnings per share:
Basic			35,166				35,209				35,179				35,655
Diluted			35,630				35,410				35,718				36,101

 

Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (UNAUDITED) (in thousands)
		December 31,				December 31,
		2022				2021
Assets
Current assets:
Cash and cash equivalents		$	207,430			$	271,749
Accounts receivable, net			491,957				355,883
Contract assets			183,613				155,243
Inventories			727,749				523,240
Other current assets			41,400				42,029
Total current assets			1,652,149				1,348,144
Property, plant and equipment, net			211,478				186,666
Operating lease right-of-use assets			93,081				99,158
Goodwill and other, net			270,623				269,912
Total assets		$	2,227,331			$	1,903,880
Liabilities and shareholders' equity
Current liabilities:
Current installments of long-term debt and finance lease obligations		$	4,275			$	985
Accounts payable			424,272				426,555
Advance payments from customers			197,937				118,124
Accrued liabilities			122,652				108,718
Total current liabilities			749,136				654,382
Long-term debt and finance lease obligations, less current installments			320,675				129,289
Operating lease liabilities			86,687				90,878
Other long-term liabilities			44,417				55,529
Shareholders' equity			1,026,416				973,802
Total liabilities and shareholders' equity		$	2,227,331			$	1,903,880

 

 

Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows (in thousands) (UNAUDITED)
		Year Ended
		December 31,
		2022				2021
Cash flows from operating activities:
Net income		$	68,229			$	35,770
Depreciation and amortization			44,252				44,152
Stock-based compensation expense			18,485				15,262
Accounts receivable, net			(135,955)				(46,967)
Contract assets			(28,370)				(12,464)
Inventories			(206,247)				(197,867)
Accounts payable			(16,656)				139,952
Advance payments from customers			93,476				34,002
Other changes in working capital and other, net			(14,681)				(14,462)
Net cash used in operations			(177,467)				(2,622)
Cash flows from investing activities:
Additions to property, plant and equipment and software			(46,774)				(42,177)
Other investing activities, net			5,600				302
Net cash used in investing activities			(41,174)				(41,875)
Cash flows from financing activities:
Share repurchases			(9,391)				(40,216)
Net debt activity			194,261				(7,648)
Other financing activities, net			(25,641)				(26,088)
Net cash provided by (used in) financing activities			159,229				(73,952)
Effect of exchange rate changes			(4,907)				(5,792)
Net decrease in cash and cash equivalents and restricted cash			(64,319)				(124,241)
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 year		$	207,430			$	271,749

 

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,				Sept 30,				Dec 31,				Dec 31,
		2022				2022				2021				2022				2021
Income from operations (GAAP)		$	26,946			$	25,284			$	18,635			$	90,069			$	53,062
Amortization of intangible assets			1,592				1,591				1,591				6,384				6,384
Restructuring charges and other costs			799				1,331				4,099				5,710				9,341
(Gain) loss on assets held for sale			—				—				—				(393)				—
Impairment			—				—				—				—				4,358
Ransomware incident related costs (recovery), net			—				—				—				—				(3,944)
Settlement			3,250				—				—				3,250				—
Customer insolvency (recovery)			—				(599)				(72)				(599)				(425)
Non-GAAP income from operations		$	32,587			$	27,607			$	24,253			$	104,421			$	68,776
GAAP operating margin			3.6	%			3.3	%			2.9	%			3.1	%			2.4	%
Non-GAAP operating margin			4.3	%			3.6	%			3.8	%			3.6	%			3.0	%
Gross Profit (GAAP)		$	72,127			$	66,750			$	62,056			$	255,235			$	205,901
Settlement			—				—				—				—				—
Customer insolvency (recovery)			—				(425)				(72)				(425)				(425)
Non-GAAP gross profit		$	72,127			$	66,325			$	61,984			$	254,810			$	205,476
GAAP gross margin			9.6	%			8.7	%			9.8	%			8.8	%			9.1	%
Non-GAAP gross margin			9.6	%			8.6	%			9.8	%			8.8	%			9.1	%
Selling, general and administrative expenses		$	39,540			$	38,544			$	37,731			$	150,215			$	136,700
Customer recovery			—				174				—				174				—
Non-GAAP selling, general and administrative expenses		$	39,540			$	38,718			$	37,731			$	150,389			$	136,700
Net income (GAAP)		$	21,219			$	18,829			$	12,419			$	68,229			$	35,770
Amortization of intangible assets			1,592				1,591				1,591				6,384				6,384
Restructuring charges and other costs			799				1,331				4,099				5,710				9,341
(Gain) loss on assets held for sale			—				—				—				(393)				—
Impairment			—				—				—				—				4,358
Ransomware incident related costs (recovery), net			—				—				—				—				(3,944)
Settlement			(2,344)				(611)				—				(2,955)				—
Customer insolvency (recovery)			—				(599)				(72)				(599)				(425)
Refinancing of Credit Facilities			—				—				276				—				276
Income tax adjustments(1)			(5)				(351)				(1,212)				(1,644)				(3,178)
Non-GAAP net income		$	21,261			$	20,190			$	17,101			$	74,732			$	48,582
Diluted earnings per share:
Diluted (GAAP)		$	0.60			$	0.53			$	0.35			$	1.91			$	0.99
Diluted (Non-GAAP)		$	0.60			$	0.57			$	0.48			$	2.09			$	1.35
Weighted-average number of shares used in calculating diluted earnings per share:
Diluted (GAAP)			35,630				35,348				35,410				35,718				36,101
Diluted (Non-GAAP)			35,630				35,348				35,410				35,718				36,101
Net cash used in operations		$	(52,749)			$	(31,208)			$	(1,314)			$	(177,467)			$	(2,622)
Additions to property, plant and equipment and software			(13,180)				(8,623)				(9,740)				(46,774)				(42,177)
Free cash flow (used)		$	(65,929)			$	(39,831)			$	(11,054)			$	(224,241)			$	(44,799)

(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.

FAQ

What are the Q4 2022 results for Benchmark Electronics (BHE)?

Benchmark Electronics reported Q4 2022 revenue of $751 million, a 19% year-over-year increase, and GAAP diluted EPS of $0.60.

What is the full year revenue growth for Benchmark Electronics (BHE) in 2022?

In 2022, Benchmark Electronics achieved a full year revenue of $2,886 million, reflecting a 28% year-over-year growth.

What is the Q1 2023 guidance for Benchmark Electronics (BHE)?

Benchmark Electronics has Q1 2023 revenue guidance of $640 million to $680 million and diluted GAAP EPS guidance between $0.35 and $0.40.

What were the earnings per share for Benchmark Electronics (BHE) in 2022?

Benchmark Electronics reported a GAAP diluted EPS of $1.91 for the full year 2022, up 93% from the previous year.