Benchmark Electronics(BHE)2025-02-24 21:19Sales Performance - Sales for 2024 were 2.8 billion in 2023, primarily due to decreases in medical and AC&C sales [173]. - Sales to the ten largest customers represented 50% of total sales in 2024, with the largest customer, Applied Materials, accounting for 14% of total sales [174]. - Sales in the Semi-Cap sector increased by 12% to 450.7 million in 2024, attributed to inventory rebalancing and end-demand weakness [182]. Financial Performance - Net income for 2024 was 1.72 per diluted share, compared to 1.79 per diluted share, in 2023 [203]. - Gross profit margin increased to 10.2% in 2024 from 9.5% in 2023, despite gross profit remaining relatively consistent at 40.2 million in 2024, primarily due to lower revenue [190]. - Interest expense decreased to 31.9 million in 2023, mainly due to decreased borrowings [198]. Cash Flow and Investments - Cash and cash equivalents totaled 283.2 million at December 31, 2023 [204]. - Cash provided from operating activities was 63.3 million net income and 32.8 million in 2024, primarily for capital expenditures of 109.1 million in 2024, including 674.1 million in principal payments under the Credit Agreement [210]. Capital Expenditures and Borrowings - The Company plans capital expenditures of approximately 75 million over the next 12 months to increase production capacity [217]. - As of December 31, 2024, the Company had 135.0 million under the revolving credit facility [215]. - The Company amended its Credit Agreement to increase the revolving credit facility commitments from 550 million [214]. - As of December 31, 2024, the Company had 5.1 million in 2024, with an average price of 23.9 million, compared to 23.2 million in 2022 [221]. Risk Management - The company is exposed to foreign currency fluctuation risks and utilizes natural hedging and forward contracts to manage transactional exposure [241]. - Sales are primarily denominated in U.S. dollars, with foreign currency cash flows generated in certain European and Asian countries and Mexico [242]. - The company is also exposed to market risks related to interest rates on financial instruments, particularly on invested cash balances [243]. - The company does not use derivative financial instruments for speculative purposes, focusing instead on managing risks associated with foreign currency and interest rates [241]. Compliance and Obligations - The Company is in compliance with all financial covenants related to its Credit Agreement as of December 31, 2024 [216]. - The company has contractual obligations extending beyond 2024 related to lease obligations and debt arrangements, with some electronic component manufacturers experiencing lead-times exceeding 52 weeks due to supply chain constraints [236]. - The company has not guaranteed obligations of any entity outside of its wholly owned subsidiaries, maintaining a conservative financial approach [236]. Goodwill and Impairment - As of December 31, 2024, the fair value of the Americas and Asia reporting units was determined to be greater than their carrying amounts, indicating no further goodwill impairment testing was required [234]. - Changes in economic and operating conditions may lead to future goodwill impairment charges, highlighting the importance of ongoing assessments [234].