Slide 1: Benchmark Electronics Sidoti Virtual Conference
Benchmark Benchmark Electronics Sidoti Virtual Conference March 13, 2024 | 1
Slide 2: Forward-Looking Statements and Non-GAAP Financial Information
Forward-Looking 2024 Statements Non-GAAP Financial Information This document contains forward-looking statements within the meaning of Section 27A of the Management discloses non‐GAAP information to provide investors with additional information to Securities Act of 1933, as amended and Section 21E o
Slide 3: Benchmark By the Numbers
Benchmark By the Numbers 2.8 billion * 2023 Sector Mix * $ 13% A&D Advanced Computing 23% 12% Complex Industrials 2023 FY revenue 12% Medical 20% Next Gen. Comms. 20% Semi-Cap 20 Global Manufacturing 12,700+ Experts in high complexity products including those in regulated environments Team Members W
Slide 4: Global Services Locations
Global Services Locations Product Design & Engineering Centers United States Europe Electronics 1. Concord, CA Manufacturing 1. Almelo, The Netherlands 2. Fremont, CA 2. Brasov, Romania Precision Technologies 3. Santa Ana, CA Manufacturing 4. Phoenix, AZ Centers of Excellence 5. Tempe, AZ (2) 6. Mes
Slide 5: EMS Market Summary
EMS Market Summary 2022 EMS Market Size Next-generation Outsourcing $561B Opportunities 2022–2027 EMS Medical < 60% Revenue CAGR Targeted Complex Markets A&D < 30% ~$110B 5.5% Industrials* < 40% Market Growth Supported by Increasing Outsourcing Opportunities Source: New Venture Research - July
Slide 6: Our Sector Focus
Our Sector Focus Delivers a competitive advantage across multiple growth drivers Semiconductor Defense Sector Lifecycle CAGR* Automation Proliferation Modernization Medical 8+ years 6% Aerospace & Defense 12+ years 5% Digital Healthcare Miniaturization Robotics Complex Industrials 6+ years 5% Semi-C
Slide 7: Sector Engagement
Sector Engagement Participation Select Customers Front-end Wafer Fabrication Equipment Semi-Cap Material Handling and Control Systems Fluid Management Radiological and Optical Imaging Medical Medical Robotics Connected & Diagnostic Devices Automation & Robotics Industrials Control,
Slide 8: Investing in Capabilities to Support Growth
Investing in Capabilities to Support Growth Medical Complex Industrial FDA Class 3 Regulatory Mechatronics Microfluidics Engineering Firmware Development Mechatronics Full Product Design Complex Automation High Volume Automation Miniaturization Robotics High Speed Design Supply
Slide 9: Focused Investment Discipline
Focused Investment Discipline Investment Priorities Regulatory & Compliance Capex% of Revenue Strategic Growth Capital Expenditures ($000) 1.7% 2.6% 1.9% $73,479 Margin Accretive Capability $43,357 $38,794 1.9% $34,584 Leading Edge Process Technologies FY20 FY21 FY22 FY23 Capex increase to 2.6% of r
Slide 10: FY20-22: Delivering on Commitments
FY20-22: Delivering on Commitments ($Millions, except per share data) Revenue Growth Non-GAAP Operating Margin Earnings Growth Mid-Term Target Model 5% Growth Per Year 3.4%* to 3.8%(1, 2) EPS Growth > Revenue Growth Results Ending FY22 13% CAGR (2) 4.0% (1, 2) 48% Non-GAAP EPS CAGR 4.0% 13% 48% $2,6
Slide 11: FY25 Target Non-GAAP Income Statement
FY25 Target Non-GAAP Income Statement (1) Revenue Growth Operating Margin Earnings Growth ~10% CAGR * 5.0%* to 5.5% * Growth Rate 2X Revenue Growth Rate 5.0%- 5.5% >$3.3B >$3.50 >$3.30 $2.6B 4.0% $2.11 $2.09 FY22 FY25E FY22 FY25E FY22E FY25E Mix shift to increase higher value business FY22 FY25E Ope
Slide 12: FY25 Target Balance Sheet and Cash Flow
FY25 Target Balance Sheet and Cash Flow(1) Capital Allocation Priorities Return on Capital Invested Other Model Inputs Free Cash Flow (FCF) $70M to $80M/Year 14%* to 15%* FY25E Targets 2025E estimated to be 400 bps above WACC Capital Spending 1.6% to 1.8% 1) Paydown revolver 14% -15% Inventory Turns
Slide 13: Trended non-GAAP Financial Summary
Trended non-GAAP Financial Summary (Dollars in Millions, except EPS) Revenue Operating Income and Margin 5.1% 4.7% 4.3% $772 $751 $728 $733 $720 4.0% $695 3.7% $636 $691 3.6% 3.4% 3.1% $34 $35 $33 $28 $29 $26 $21 $23 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23
Slide 14: Appendix
Appendix Benchmark 14 Copy 24 by original author Benchmark Electronics, Inc. Not to be reproduced, distributed, or used in any means without wntten permission by Benchmark
Slide 15: First Quarter 2024 Guidance
First Quarter 2024 Guidance Q1 2024 Net Sales $625 - $665 million Gross Margin – non-GAAP 9.8% - 10.2% Operating Margin – non-GAAP 4.5% - 4.7% Other Expenses, Net $8.5 million Effective Tax Rate 23% – 25% Diluted EPS – GAAP $0.32 - $0.38 Diluted EPS – non-GAAP $0.42 - $0.48 Diluted Weighted-Average
Slide 16: Sector Outlook
Sector Outlook 1H 2024 Sector Commentary • Early signs of a potential recovery late 2024, but first half expected to remain consistent with recent levels Semi-Cap • We continue to out-perform the market and are winning new business • Seeing broad-based softness across the industry driven by Medical
Slide 17: Liquidity Update
Liquidity Update For the Twelve For the Three Months Ended Months Ended Dec 31, Dec 31, Dec 31, Sep 30, Dec 30, • Strong balance sheet and (In Millions) 2023 2022 2023 2023 2022 leverage ratio Cash Flows from (used in) $174 ($177) $137 $38 ($53) • Working down inventory to help Operations $97 ($224)
Slide 18: Capital Allocation Update
Capital Allocation Update • In FY 2023, paid $78 million in capital expenditures Capital • Since 2018, invested $305 million in additions to property, plant and equipment and software Expenditures • Capital expenditures tightly aligned to future organic growth objectives • Capex for Fiscal Year 2024
Slide 19: Reconciliation of GAAP to non-GAAP Financial Results
APPENDIX 1 - Reconciliation of GAAP to non-GAAP Financial Results (Dollars in Thousands, Except Per Share Data) – (UNAUDITED) | 19
Slide 20: Reconciliation of Supply Chain Premiums
APPENDIX 2 - Reconciliation of Supply Chain Premiums (Dollars in Millions) – (UNAUDITED) | 20
Slide 21: Reconciliation of Supply Chain Premiums by Sector
APPENDIX 3 - Reconciliation of Supply Chain Premiums by Sector (Dollars in Millions) – (UNAUDITED) | 21