Benchmark Electronics(BHE) - 2025 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION This section presents the company's unaudited financial statements and management's analysis of its financial condition and operations Item 1. Financial Statements (Unaudited) Unaudited consolidated financial statements and notes are presented for periods ending June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets The company's financial position as of June 30, 2025, and December 31, 2024, is presented, detailing assets, liabilities, and equity | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $2,030,845 | $2,139,464 | | Total Liabilities | $923,975 | $1,026,151 | | Total Shareholders' Equity | $1,106,870 | $1,113,313 | | Cash and cash equivalents | $264,647 | $315,152 | | Inventories | $531,986 | $553,654 | Condensed Consolidated Statements of Income This section details the company's sales, net income, EPS, and income tax expense for the three and six months ended June 30, 2025, and 2024 | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (%) | | :------------------ | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Sales | $642,335 | $665,896 | -3.5% | | Net income | $972 | $15,528 | -93.7% | | Basic EPS | $0.03 | $0.43 | -93.0% | | Diluted EPS | $0.03 | $0.43 | -93.0% | | Income tax expense | $15,635 | $4,995 | +213.0% | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (%) | | :------------------ | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Sales | $1,274,099 | $1,341,471 | -5.0% | | Net income | $4,616 | $29,530 | -84.4% | | Basic EPS | $0.13 | $0.82 | -84.2% | | Diluted EPS | $0.13 | $0.81 | -84.0% | | Income tax expense | $20,385 | $10,092 | +102.0% | Condensed Consolidated Statements of Comprehensive Income This section presents comprehensive income, foreign currency translation adjustments, and unrealized gains/losses on derivatives | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (%) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Comprehensive income | $11,010 | $11,646 | -5.5% | | Foreign currency translation adjustments | $7,066 | $(523) | N/A | | Unrealized gain (loss) on derivatives, net of tax | $2,852 | $(3,425) | N/A | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (%) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Comprehensive income | $18,796 | $26,888 | -30.1% | | Foreign currency translation adjustments | $10,296 | $(2,060) | N/A | | Unrealized gain (loss) on derivatives, net of tax | $3,684 | $(691) | N/A | Condensed Consolidated Statements of Shareholders' Equity This section outlines changes in total shareholders' equity, net income, other comprehensive income, dividends, and share repurchases | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Total Shareholders' Equity | $1,106,870 | $1,113,313 | | Net income (YTD) | $4,616 | $29,530 | | Other comprehensive income (YTD) | $14,180 | $(2,642) | | Dividends declared (YTD) | $(12,241) | $(11,905) | | Shares repurchased and retired (YTD) | $(15,995) | $0 | | Stock-based compensation expense (YTD) | $9,732 | $6,361 | Condensed Consolidated Statements of Cash Flows This section details cash flows from operating, investing, and financing activities, and the period-end cash balance | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (%) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Net cash provided by operating activities | $28,680 | $104,274 | -72.5% | | Net cash used in investing activities | $(16,398) | $(15,812) | +3.7% | | Net cash used in financing activities | $(85,415) | $(58,892) | +45.0% | | Cash, cash equivalents and restricted cash at end of period | $264,647 | $309,865 | -14.6% | - Principal payments on credit agreement increased to $446,641 thousand in H1 2025 from $361,641 thousand in H1 2024[21] - Share repurchases amounted to $15,995 thousand in H1 2025, compared to none in H1 2024[21] Notes to the Condensed Consolidated Financial Statements This section provides detailed explanations of the company's accounting policies, financial instruments, and other relevant financial information Note 1 – Basis of Presentation This note describes the company's business, services, market sectors, and global manufacturing operations - Benchmark Electronics, Inc. provides advanced manufacturing services, including design and engineering services and technology solutions, to original equipment manufacturers (OEMs)[23] - The company serves market sectors such as industrial, aerospace and defense (A&D), medical, semiconductor capital equipment (Semi-Cap), and advanced computing and communications (AC&C)[23] - Manufacturing operations are located in the Americas (United States and Mexico), Asia, and Europe[23] Note 2 – New Accounting Pronouncements This note discusses the company's evaluation of recently issued accounting standards and their potential impact on financial statements - The company is evaluating the impact of ASU 2023-09, 'Improvements to Income Tax Disclosures,' effective for annual periods beginning after December 15, 2024[26] - The company is evaluating the impact of ASU 2024-03, 'Disaggregation of Income Statement Expenses,' effective for annual periods beginning after December 15, 2026[27] - No other recently issued accounting standards are expected to have a material impact on the company's financial statements[28] Note 3 – Inventories This note provides a breakdown of inventory by category, including raw materials, work in process, and finished goods | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------- | :----------------------------- | :------------------------------- | | Raw materials | $509,158 | $528,424 | | Work in process | $19,107 | $18,761 | | Finished goods | $3,721 | $6,469 | | Total inventories | $531,986 | $553,654 | Note 4 – Goodwill and Other Intangible Assets This note details the carrying amounts of goodwill and other intangible