BENCHMARK REPORTS FOURTH QUARTER AND FISCAL YEAR 2023 RESULTS

Fourth quarter 2023 results:

• Revenue of $691 million
• Generated net cash provided by operations of $137 million and positive free cash flow⁽¹⁾ of $126 million
• GAAP and non-GAAP⁽¹⁾ gross margin of 10.3%
• GAAP operating margin of 4.6% and non-GAAP⁽¹⁾ operating margin of 5.1%
• GAAP and non-GAAP⁽¹⁾ earnings per share of $0.49 and $0.58, respectively

Full year 2023 results:

• Revenue of $2.8 billion
• Delivered net cash provided by operations of $174 million and positive free cash flow⁽¹⁾ of $97 million
• GAAP and non-GAAP⁽¹⁾ gross margin of 9.5%, up 70 basis points year-over-year
• GAAP operating margin of 3.9% and non-GAAP⁽¹⁾ operating margin of 4.4%
• GAAP and non-GAAP⁽¹⁾ earnings per share of $1.79 and $2.04, respectively

TEMPE, Ariz., Jan. 31, 2024 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the fourth quarter and year ended December 31, 2023.

"Benchmark delivered another solid year of performance in 2023 as we continued to execute to our strategic plan. I'm particularly pleased with our free cash flow performance which was aided by inventory reductions.  At the same time, our operational discipline allowed us to expand both gross and operating margin despite the dynamic environment," said Jeff Benck, Benchmark's President and CEO. 

Benck continued, "Looking forward, we expect the current demand softness across several of our end-markets will likely persist through the first half of 2024, driven by customers closely managing inventories. However, as demonstrated by our performance this past year, I am confident in our ability to deliver further margin expansion and positive free cash flow in 2024."

Cash Conversion Cycle

Fourth Quarter 2023 Industry Sector Update
Revenue and percentage of sales by industry sector were as follows.

Revenue decreased year over year primarily due to a decrease in Next Gen Communications of 35% and a decrease in Medical of 13%, partially offset by an increase in A&D of 13%. 

First Quarter 2024 Guidance

• Revenue between $625 million - $665 million
• Diluted GAAP earnings per share between $0.32 - $0.38
• Diluted non-GAAP earnings per share between $0.42 - $0.48 (excluding restructuring charges and other costs and amortization of intangibles)

Restructuring charges are expected to range between $3.1 million and $3.5 million in the first quarter of 2024 and the amortization of intangibles is expected to be $1.2 million in the first quarter.

Fourth Quarter 2023 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 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 Company's outlook and guidance for first quarter and fiscal year 2024 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, 2022, and in any of the Company's subsequent reports filed with the Securities and Exchange Commission. Events relating to the possibility of customer demand fluctuations, supply chain constraints, continuing inflationary pressures, the effects of foreign currency fluctuations and high interest rates, geopolitical uncertainties including continuing hostilities and tensions, trade restrictions and sanctions, 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 the Company's 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", a non-GAAP measure, 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.

SOURCE Benchmark Electronics, Inc.