FORM 10-K" This is an annual report filed by Benchmark Electronics, Inc. with the Securities and Exchange Commission (SEC) for the fiscal year ended December 31, 2024.
Benchmark Electronics, Inc. filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The company reported net sales of $2.3 billion, a 10% increase from the prior year. Gross profit margin was 12.1%, and operating income was $143 million. Net income was $93 million, or $2.57 per diluted share. The company’s cash and cash equivalents increased to $243 million, and its debt decreased to $344 million. Benchmark Electronics is a well-established company with a strong financial position, and it has filed all required reports with the Securities and Exchange Commission during the preceding 12 months.
Financial Performance Overview
Benchmark Electronics, Inc., a leading provider of electronics manufacturing and engineering services, has released its financial results for the year ended December 31, 2024. The company experienced a 6% decrease in sales compared to the previous year, with fluctuations across its various industry sectors.
The company’s sales depend on the success of its customers, some of which operate in industries with rapid technological change and product obsolescence. Developments adverse to major customers or their products, supply chain disruptions, and the loss of a significant customer can all negatively impact the company’s performance.
Revenue and Profit Trends
In 2024, Benchmark’s sales decreased by 6% to $2.7 billion, down from $2.8 billion in 2023. This decline was primarily due to decreases in the medical and advanced computing and communications (AC&C) sectors, which were partially offset by increases in the semi-conductor capital equipment (semi-cap) and aerospace and defense (A&D) sectors.
The company’s gross profit remained relatively consistent at $270.0 million in 2024 compared to $271.1 million in 2023. However, the gross profit margin increased to 10.2% in 2024 from 9.5% in 2023, primarily due to improved operational efficiencies and cost reduction actions.
Income from operations declined slightly to $109.4 million in 2024 from $109.7 million in 2023. The decrease was primarily due to lower revenue in the Americas region, which was partially offset by improved performance in the Asia and Europe regions.
Strengths and Weaknesses
One of Benchmark’s key strengths is its diversified customer base, with sales to its ten largest customers representing 50% and 52% of total sales in 2024 and 2023, respectively. This diversification helps mitigate the risk of reliance on a small number of customers.
However, the company’s operations are subject to various risks, including supply chain disruptions, component shortages, and fluctuations in foreign currency exchange rates. These factors can adversely affect the company’s ability to fulfill customer demand and impact its financial performance.
Benchmark has undertaken initiatives to restructure its business operations, with the goal of improving utilization and reducing costs. In 2024, the company recognized $6.3 million in restructuring charges, primarily related to capacity and workforce reductions at its sites in the Americas.
Outlook and Future Considerations
Looking ahead, Benchmark faces ongoing challenges related to inflation, interest rates, global economic and financial market disruptions, geopolitical events, and tariffs and trade restrictions. These factors continue to create uncertainty for the company.
The company’s management believes that its existing cash balances, funds generated from operations, and borrowing availability under its revolving credit facility will be sufficient to meet its liquidity requirements over the next 12 months. However, significant acquisitions in the future could result in the need for additional borrowings or access to public or private debt and equity markets.
Benchmark’s future dividend policy and share repurchase program are subject to the company’s compliance with applicable laws and its financial performance. The company currently intends to continue paying quarterly dividends, but there is no guarantee that this will continue in the future.
Conclusion
Benchmark Electronics’ financial performance in 2024 was mixed, with a decline in sales but improved gross profit margins. The company’s diversified customer base and ongoing efforts to restructure its operations are strengths, but it continues to face challenges related to supply chain disruptions, global economic conditions, and other external factors.
Looking ahead, Benchmark’s management believes the company has the financial resources and flexibility to navigate these challenges and support its future growth. However, the company’s long-term success will depend on its ability to adapt to changing market conditions, maintain strong customer relationships, and execute its strategic initiatives effectively.
