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NYSEBHE
Benchmark Reports Fourth Quarter And Full Year 2020 Results
Fourth quarter 2020 results:
- Revenue of $521 million
- GAAP gross margin of 9.7% and non-GAAP gross margin of 9.6%
- Cash flow generated from operations of $95 million
- GAAP diluted EPS of $0.21 and non-GAAP diluted EPS of $0.34
Full year 2020 results:
- Revenue of $2.1 billion
- Semi-Cap revenue growth of 33% year-over-year
- Medical revenue growth of 11% year-over-year
- Higher-value markets revenue mix greater than 80%

TEMPE, Ariz., Feb. 4, 2021 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the fourth quarter and year ended December 31, 2020.



Three Months Ended




Dec 31,



Sep 30,



Dec 31,


In millions, except EPS


2020



2020



2019


Sales


$

521



$

526



$

508


Net income (loss)(2)


$

8



$

6



$

(7)


Net income – non-GAAP(1)(2)


$

13



$

12



$

10


Diluted earnings (loss) per share(2)


$

0.21



$

0.16



$

(0.19)


Diluted EPS – non-GAAP(1)(2)


$

0.34



$

0.32



$

0.27


Operating margin(2)



2.3

%



1.6

%



(1.8)

%

Operating margin – non-GAAP(1)(2)



3.4

%



3.0

%



2.6

%





Twelve Months Ended




Dec 31,



Dec 31,


In millions, except EPS


2020



2019


Net sales


$

2,053



$

2,268


Net income(3)


$

14



$

23


Net income – non-GAAP(1)(3)


$

35



$

51


Diluted EPS(3)


$

0.38



$

0.60


Diluted EPS – non-GAAP(1)(3)


$

0.95



$

1.32


Operating margin(3)



1.2

%



1.3

%

Operating margin – non-GAAP(1)(3)



2.5

%



3.0

%



(1)

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

(2)

Results for the fourth quarter ended December 31, 2020 and third quarter ended September 30, 2020 include the impact of approximately $1.6 million and $1.3 million of net COVID-19 related costs, respectively.

(3)

Results for the year ended December 31, 2020 include the impact of approximately $7.1 million of net COVID-19 related costs.

Jeff Benck, Benchmark's President and CEO stated, "We closed out a very challenging year, delivering fourth quarter results that not only met our expectations, but demonstrated sequential improvement in both non-GAAP gross margins at 9.6% and higher non-GAAP earnings at $0.34 enabled by higher-value sector mix and improved utilization across the company.  I am very proud of our team, which has proven to be very resourceful and resilient in the face of this pandemic and continues to deliver for our customers."  

Benck continued, "Our focused efforts on improving working capital management are also bearing fruit as we generated $95 million of operating cash flow in the quarter and over $120 million for the year, which exceeded our forecast.  I look forward to 2021 with optimism knowing that our strategic investments in the business to drive differentiated value and sustainability have solidified a path to achieve revenue, margin, and earnings growth in 2021 aligned with our mid-term financial goals."

Cash Conversion Cycle



Dec 31,



Sep 30,



Dec 31,




2020



2020



2019


Accounts receivable days



53




52




57


Contract asset days



25




28




29


Inventory days



63




66




60


Accounts payable days



(54)




(54)




(58)


Advance payments from customers days



(16)




(11)




(7)


Cash Conversion Cycle days



71




81




81


Fourth Quarter 2020 Industry Sector Update
Revenue and percentage of sales by industry sector (in millions) was as follows.


Dec 31,



Sep 30,



Dec 31,


Higher-Value Markets

2020



2020



2019


Medical

$

111


21

%


$

134


26

%


$

103


20

%

Semi-Cap


101


20




99


19




81


16


A&D


111


21




105


20




106


21


Industrials


97


19




86


16




107


21



$

420


81

%


$

424


81

%


$

397


78

%




















Dec 31,



Sep 30,



Dec 31,


Traditional Markets

2020



2020



2019


Computing

$

46


9

%


$

44


8

%


$

45


9

%

Telecommunications


55


10




58


11




66


13



$

101


19

%


$

102


19

%


$

111


22

%

Total

$

521


100

%


$

526


100

%


$

508


100

%

Overall, higher-value market revenues were up 6% year-over-year from strength in the Semi-Cap, Medical, and A&D sectors. Traditional market revenues were down from program transitions.

First Quarter 2021 Outlook

  • Revenue between $480 - $520 million
  • Diluted GAAP earnings per share between $0.11 - $0.14
  • Diluted non-GAAP earnings per share between $0.18 - $0.22 (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 $1.0 million and $2.0 million in the first quarter and the amortization of intangibles is expected to be $2.0 million in the first quarter.

Fourth Quarter 2020 and CY2020 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 Thursday, February 11, 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 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "estimate," "anticipate," "could", "predict" and similar expressions, and the negatives thereof, often identify forward-looking statements, which are not limited to historical facts. Forward-looking statements include, among other things, the estimated financial impact of the COVID-19 pandemic, our outlook and guidance for first quarter 2021 results, the company's anticipated plans and responses to the COVID-19 pandemic, statements (express or implied) concerning future operating results or margins, the ability to generate sales and income or cash flow, and expected revenue mix, and Benchmark's business and growth strategies. Although the company believes these statements are based on and derived from reasonable assumptions, they involve risks and uncertainties relating to operations, markets and the business environment generally.  These statements also depend on the duration and severity of the COVID-19 pandemic and related risks, including government and other fourth-party responses to the crisis and the consequences for the global economy, our business and the businesses of our 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 our manufacturing facilities at sufficient levels to cover our 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.  If one or more of these risks or uncertainties materializes, or underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Readers are advised to consult further disclosures on these risks and uncertainties, particularly in Part 1, Item 1A, "Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2019 and in Part II, Item 1A, "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 and in its subsequent filings with the Securities and Exchange Commission. All forward-looking statements included in this document are based upon information available to the company as of the date of this document, and it assumes no obligation to update them.

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 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



Year Ended



December 31,



December 31,



2020



2019



2020



2019


Sales

$

521,250



$

508,444



$

2,053,131



$

2,268,095


Cost of sales


470,589




471,131




1,878,083




2,082,567


Gross profit


50,661




37,313




175,048




185,528


Selling, general and administrative expenses


32,380




34,279




122,195




126,740


Amortization of intangible assets


1,979




2,366




9,099




9,461


Restructuring charges and other costs


4,490




2,268




19,970




13,101


Ransomware incident related costs (recovery), net


(45)




7,681




(1,350)




7,681


Income (loss) from operations


11,857




(9,281)




25,134




28,545


Interest expense


(2,175)




(1,650)




(8,364)




(6,664)


Interest income


156




745




1,196




3,829


Other income (expense), net


(482)




(717)




(673)




1,559


Income (loss) before income taxes


9,356




(10,903)




17,293




27,269


Income tax expense


1,661




(3,972)




3,238




3,844


Net income (loss)

$

7,695



$

(6,931)



$

14,055



$

23,425


Earnings (loss) per share:
















Basic

$

0.21



$

(0.19)



$

0.38



$

0.61


Diluted

$

0.21



$

(0.19)



$

0.38



$

0.60


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
















Basic


36,402




36,928




36,524




38,338


Diluted


36,596




36,928




36,817




38,763


For comparative purposes, certain prior year amounts have been reclassified to conform to the current year presentation.

Benchmark Electronics, Inc. and Subsidiaries


Condensed Consolidated Balance Sheets

(UNAUDITED)

(in thousands)



December 31,



December 31,


2020



2019

Assets







Current assets:







Cash and cash equivalents

$

390,808



$

347,558

Restricted cash


5,182




16,398

Accounts receivable, net


309,331




324,424

Contract assets


142,779




161,061

Inventories


327,377




314,956

Other current assets


26,874




30,685

Total current assets


1,202,351




1,195,082

Property, plant and equipment, net


185,272




205,819

Operating lease right-of-use assets


79,966




76,859

Goodwill and other, net


276,646




282,114

Total assets

$

1,744,235



$

1,759,874








Liabilities and Shareholders' Equity







Current liabilities:







Current installments of long-term debt and finance lease obligations

$

9,161



$

8,825

Accounts payable


282,208




302,994

Advance payments from customers


84,122




37,511

Accrued liabilities


105,645




109,915

Total current liabilities


481,136




459,245

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


131,051




138,912

Operating lease liabilities


72,120




67,898

Other long-term liabilities


70,340




78,987

Shareholders' equity


989,588




1,014,832

Total liabilities and shareholders' equity

$

1,744,235



$

1,759,874

 

Benchmark Electronics, Inc. and Subsidiaries


Condensed Consolidated Statement of Cash Flows

(in thousands)

(UNAUDITED)



Year Ended


December 31,


2020



2019

Cash flows from operating activities:







Net income

$

14,055



$

23,425

Depreciation and amortization


48,792




48,427

Stock-based compensation expense


10,398




10,194

Accounts receivable, net


13,586




134,926

Contract assets


18,282




(20,979)

Inventories


(10,799)




(5,238)

Accounts payable


(15,553)




(121,860)

Advance payments from customers


46,612




9,254

Other changes in working capital and other, net


(4,935)




14,987

Net cash provided by operations


120,438




93,136








Cash flows from investing activities:







Additions to property, plant and equipment and software


(39,519)




(35,118)

Other investing activities, net


5,136




255

Net cash used in investing activities


(34,383)




(34,863)








Cash flows from financing activities:







Share repurchases


(25,220)




(122,110)

Net debt activity


(7,987)




(6,794)

Other financing activities, net


(24,319)




(23,933)

Net cash used in financing activities


(57,526)




(152,837)








Effect of exchange rate changes


3,505




418

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


32,034




(94,146)

Cash and cash equivalents and restricted cash at beginning of year


363,956




458,102

Cash and cash equivalents and restricted cash at end of year

$

395,990



$

363,956

 

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,


Sep 30,


Dec 31,


Dec 31,


2020


2020


2019


2020


2019

Income (loss) from operations (GAAP)

$

11,857


$

8,659


$

(9,281)


$

25,134


$

28,545

Restructuring charges and other costs


4,490



1,425



2,268



13,227



13,101

Ransomware incident related costs (recovery), net


(45)



(1,558)



7,681



(1,350)



7,681

Settlement






(773)





Impairment




5,736





6,743



Customer insolvency (recovery)


(553)



(796)



11,036



(1,702)



8,278

Amortization of intangible assets


1,979



2,368



2,366



9,099



9,461

Non-GAAP income from operations

$

17,728


$

15,834


$

13,297


$

51,151


$

67,066
















Gross Profit (GAAP)

$

50,661


$

46,354


$

37,313


$

175,048


$

185,528

Settlement






(773)





Customer insolvency (recovery)


(553)



(796)



967



(1,702)



(73)

Non-GAAP gross profit

$

50,108


$

45,558


$

37,507


$

173,346


$

185,455
















Net income (loss) (GAAP)

$

7,695


$

5,915


$

(6,931)


$

14,055


$

23,425

Restructuring charges and other costs


4,490



1,425



2,268



13,227



13,426

Ransomware incident related costs (recovery), net


(45)



(1,558)



7,681



(1,350)



7,681

Customer insolvency (recovery)


(553)



(796)



11,036



(1,702)



8,278

Amortization of intangible assets


1,979



2,368



2,366



9,099



9,461

Settlements






(773)





(3,021)

Impairment




5,736





6,743



Income tax adjustments(1)


(1,006)



(1,458)



(5,385)



(5,157)



(8,095)

Non-GAAP net income

$

12,560


$

11,632


$

10,262


$

34,915


$

51,155
















Diluted earnings (loss) per share:















Diluted (GAAP)

$

0.21


$

0.16


$

(0.19)


$

0.38


$

0.60

Diluted (Non-GAAP)

$

0.34


$

0.32


$

0.27


$

0.95


$

1.32
















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















Diluted (GAAP)


36,596



36,544



36,928



36,817



38,763

Diluted (Non-GAAP)


36,596



36,544



37,374



36,817



38,763



(1)

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

 

SOURCE Benchmark Electronics, Inc.

For further information: Lisa K. Weeks, VP of Strategy & Investor Relations, 623-300-7052 or lisa.weeks@bench.com
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CONTACTS

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Lisa.Weeks@bench.com

 

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