Slide 1: Fourth Quarter and Fiscal Year 2023 Financial Results
Benchmark Benchmark Electronics Fourth Quarter and Fiscal Year 2023 Financial Results January 31, 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: Fourth Quarter 2023 Results
Fourth Quarter 2023 Results • Revenue of $691 million - Total revenue impacted by $38 million reduction in supply chain premiums (SCP)* versus the prior year • GAAP and non-GAAP** gross margin of 10.3%, expanded 70 basis points year-over-year • GAAP operating margin of 4.6% with non-GAAP** of 5.1%,
Slide 4: Fiscal Year 2023 Results
Fiscal Year 2023 Results • Revenue of $2.8 billion - Total revenue impacted by $209 million reduction in supply chain premiums (SCP)* versus prior year • GAAP and non-GAAP** gross margin of 9.5%, expanded 70 basis points year-over-year • GAAP operating margin of 3.9% with non-GAAP** of 4.4%, up 80 b
Slide 5: Roop Lakkaraju, Chief Financial Officer
Roop Lakkaraju Chief Financial Officer | 5
Slide 6: Fourth Quarter 2023 GAAP Revenue by Market Sector
Fourth Quarter 2023 GAAP Revenue by Market Sector 10% 14% Revenue by Mix and Market Sector For the Three Months Ended 19% (Dollars in Millions) Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 Q4-23 18% Sector Mix % Revenue Mix % Revenue Q/Q Mix % Revenue Y/Y Medical 18% $126 21% $149 (15)% 19% $144 (13%) Sem
Slide 7: Sector Results Excluding Supply Chain Premiums
Sector Results Excluding Supply Chain Premiums Q4 2023 Supply Chain Revenue Y/Y (Dollars in Millions) Total Revenue Premiums (SCP) adjusted for SCP adjusted for SCP Medical $126 ($2) $124 (7%) Semi-Cap $168 $0 $168 (5%) Aerospace & Defense $102 $0 $102 15% Industrials $132 ($4) $128 8% Advanced Comp
Slide 8: Fourth Quarter 2023 Financial Summary
Fourth Quarter 2023 Financial Summary (Dollars in Millions, except Dec 31, 2023 Sep 30, 2023 Q/Q Dec 31, 2022 Y/Y EPS) Net Sales $691 $720 (4%) $751 (8%) GAAP Gross Margin 10.3% 9.6% 70 bps 9.6% 70 bps GAAP SG&A $35.6 $35.5 0% $39.5 (10%) GAAP Operating Margin 4.6% 4.2% 40 bps 3.6% 100 bps GAAP Dilu
Slide 9: Fiscal Year 2023 Reported Revenue by Market Sector
Fiscal Year 2023 Reported Revenue by Market Sector 12% 12% Revenue by Mix and Market Sector For the Twelve Months Ended 21% Dec 31, 2023 Dec 31, 2022 FY-23 Dollars in Millions 20% Sector Mix % Revenue Mix % Revenue Y/Y Medical 20% $557 21% $593 (6%) Semi-Cap 23% $646 25% $722 (11%) 23% 13% Aerospace
Slide 10: Sector Results Excluding Supply Chain Premiums
Sector Results Excluding Supply Chain Premiums Fiscal Year 2023 (Dollars in Millions) Supply Chain Revenue Y/Y Total Revenue Premiums (SCP) adjusted for SCP adjusted for SCP Medical $557 ($12) $545 9% Semi-Cap $646 ($3) $643 (9%) Aerospace & Defense $362 ($1) $361 6% Industrials $596 ($32) $564 17%
Slide 11: Fiscal Year 2023 Financial Summary
Fiscal Year 2023 Financial Summary (Dollars in Millions, except Dec 31, 2023 Dec 31, 2022 Y/Y (%) EPS) Net Sales $2,839 $2,886 (2%) GAAP Gross Margin 9.5% 8.8% 70 bps GAAP SG&A $147.0 $150.2 (2%) GAAP Operating Margin 3.9% 3.1% 80 bps GAAP Diluted EPS $1.79 $1.91 (6%) GAAP ROIC 9.1% 7.4% 170 bps Net
Slide 12: Non-GAAP Financial Summary Excluding Supply Chain Premiums
Non-GAAP Financial Summary Excluding Supply Chain Premiums (Dollars in Millions, except EPS) See APPENDIX 1 and APPENDIX 2 for reconciliations of GAAP to non-GAAP Financial Results | 12
Slide 13: Cash Conversion Cycle Update
Cash Conversion Cycle Update Q4-23 Q3-23 Q2-23 Q1-23 Q4-22 Accounts Receivable Days 59 60 59 60 59 Contract Asset Days 23 24 23 25 22 Inventory Days 99 100 102 111 97 Accounts Payable Days (53) (53) (56) (60) (56) Advance Payments from Customer Days (30) (26) (25) (27) (26) Cash Conversion Cycle Day
Slide 14: 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 15: 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 16: 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 17: Business Trends
Business Trends Jeff Benck - CEO | 17
Slide 18: 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 19: Summary
Summary 2023 was a year of strong execution ‒ Generated $97 million in Free Cash Flow ‒ Invested to exploit the Semi-Cap secular growth opportunity ‒ Delivered on Gross and Operating Margin expansion ‒ Significantly reduced Net Debt 2024 objectives ‒ Manage volatility while continuing to progress to
Slide 20: Appendix
Appendix Benchmark 20 Copyright © 2024 by original author Benchmark Electronics, Inc. Not to be reproduced, distributed, or used in any means without written permission by Benchmark.
Slide 21: 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) | 21
Slide 22: Reconciliation of Supply Chain Premiums
APPENDIX 2 - Reconciliation of Supply Chain Premiums (Dollars in Millions) – (UNAUDITED) | 22
Slide 23: Reconciliation of Supply Chain Premiums by Sector
APPENDIX 3 - Reconciliation of Supply Chain Premiums by Sector (Dollars in Millions) – (UNAUDITED) | 23