TEMPE, Ariz., May 1, 2024 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE:BHE) today announced financial results for the first quarter ended March 31, 2024. First quarter 2024 results: Revenue of $676 million Generated net cash provided by operations of $48 million and positive free cash flow(1) of $43 million GAAP and non-GAAP(1) gross margin of 10.0% GAAP and non-GAAP(1) operating margin of 3.8% and 4.9%, respectively GAAP and non-GAAP(1) earnings per share of $0.38 and $0.55, respectively Three Months Ended March 31, December 31, March 31, (Amounts in millions, except per share data) 2024 2023 2023 Sales $ 676 $ 691 $ 695 Net income $ 14 $ 18 $ 12 Income from operations $ 26 $ 32 $ 23 Net income – non-GAAP(1) $ 20 $ 23 $ 19 Income from operations – non-GAAP(1) $ 33 $ 38 $ 31 Diluted earnings per share $ 0.38 $ 0.49 $ 0.35 Diluted earnings per share – non-GAAP(1) $ 0.55 $ 0.65 $ 0.51 Operating margin 3.8 % 4.6 % 3.3 % Operating margin – non-GAAP(1) 4.9 % 5.5 % 4.4 % (1) Beginning in the quarter ended March 31, 2024, the Company began to exclude stock-based compensation from non-GAAP results. A reconciliation of non-GAAP results to the most directly comparable GAAP measures and a discussion of why management believes these non-GAAP results are useful is included below. "We are pleased with our strong performance in the first quarter, which reflects our focus on driving operational efficiency while continuing our strategic investments in support of our future growth.  We again delivered year-over-year improvement in both GAAP and non-GAAP gross and operating margins which, coupled with our reductions in inventory, resulted in our fourth consecutive quarter of positive cash flow from operations and free cash flow. These results underscore our commitment to drive long-term value to both our customers and shareholders," said Jeff Benck, Benchmark's President and CEO. Cash Conversion Cycle March 31, December 31, March 31, 2024 2023 2023 Accounts receivable days 56 59 60 Contract asset days 24 23 25 Inventory days 94 99 111 Accounts payable days (52) (53) (60) Advance payments from customers days (28) (30) (27) Cash conversion cycle days 94 98 109 First Quarter 2024 Industry Sector Update Revenue and percentage of sales by industry sector were as follows. March 31, December 31, March 31, (In millions) 2024 2023 2023 Semi-Cap $ 166 25 % $ 168 24 % $ 149 21 % Complex Industrials 141 21 % 132 19 % 144 21 % Medical 115 17 % 126 18 % 137 20 % A&D 106 16 % 102 15 % 79 11 % Advanced Computing 90 13 % 95 14 % 96 14 % Next-Generation    Communications 58 8 % 68 10 % 90 13 % Total $ 676 100 % $ 691 100 % $ 695 100 % Revenue decreased quarter over quarter and year over year primarily due to decreases in Medical, Advanced Computing and Next-Generation Communication sales, which were partially offset by an increase in Complex Industrials sales quarter-over-quarter and increases in Semi-Cap and A&D sales year-over-year. Second Quarter 2024 Guidance Revenue between $615 million - $655 million Diluted GAAP earnings per share between $0.32 - $0.38 Diluted non-GAAP earnings per share between $0.48 - $0.54 Non-GAAP earnings per share guidance excludes restructuring charges and other costs, amortization of intangible assets and, beginning in the quarter ended March 31, 2024, stock-based compensation expense. In the second quarter of 2024, restructuring charges are expected to be approximately $2.0 million, stock-based compensation expense is expected to be $4.4 million and the amortization of intangible assets is expected to be $1.2 million. First Quarter 2024 Earnings Conference Call The Company will host a conference call to discuss the results today at 5:00 p.m. Eastern Time. The live webcast of the call and accompanying reference materials will be accessible by logging on to the Company's website at www.bench.com. A replay of the broadcast will also be available on the Company's website. About Benchmark Electronics, Inc. Benchmark provides comprehensive solutions across the entire product life cycle by leading through its innovative technology and engineering design services, leveraging its optimized global supply chain and delivering world-class manufacturing services in the following industries: semiconductor capital equipment, complex industrials, medical, commercial aerospace, defense, advanced computing, and next generation telecommunications. Benchmark's global operations include facilities in seven countries and its common shares trade on the New York Stock Exchange under the symbol BHE. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts and may include words such as "anticipate," "believe," "intend," "plan," "project," "forecast," "strategy," "position," "continue," "estimate," "expect," "may," "will," "could," "predict," and similar expressions of the negative or other variations thereof. In particular, statements, express or implied, concerning the Company's outlook and guidance for second quarter and fiscal year 2024 results, future operating results or margins, the ability to generate sales and income or cash flow, expected revenue mix, the Company's business strategy and strategic initiatives, the Company's repurchases of shares of its common stock, the Company's expectations regarding restructuring charges, stock-based compensation expense and amortization of intangibles, and the Company's intentions concerning the payment of dividends, among others, are forward-looking statements. Although the Company believes these statements are based on and derived from reasonable assumptions, they involve risks, uncertainties and assumptions that are beyond the Company's ability to control or predict, relating to operations, markets and the business environment generally, including those discussed under Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and in any of the Company's subsequent reports filed with the Securities and Exchange Commission. Events relating to the possibility of customer demand fluctuations, supply chain constraints, continuing inflationary pressures, the effects of foreign currency fluctuations and high interest rates, geopolitical uncertainties including continuing hostilities and tensions, trade restrictions and sanctions, or the ability to utilize the Company's manufacturing facilities at sufficient levels to cover its fixed operating costs, may have resulting impacts on the Company's business, financial condition, results of operations, and the Company's ability (or inability) to execute on its plans. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes, including the future results of the Company's operations, may vary materially from those indicated. Undue reliance should not be placed on any forward-looking statements. Forward-looking statements are not guarantees of performance. All forward-looking statements included in this document are based upon information available to the Company as of the date of this document, and the Company assumes no obligation to update. Non-GAAP Financial Measures Management discloses certain non‐GAAP information to provide investors with additional information to analyze the Company's performance and underlying trends. These non-GAAP financial measures exclude restructuring charges, stock-based compensation expense, amortization of intangible assets, acquired in business combinations, certain legal and other settlement losses (gains), customer insolvency losses (recoveries), asset impairments, other significant non-recurring costs and the related tax impacts of all of the above. A detailed reconciliation between GAAP results and results excluding certain items ("non-GAAP") is included in the following tables attached to this document. In situations where a non-GAAP reconciliation has not been provided, the Company was unable to provide such a reconciliation without unreasonable effort due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. Management uses non‐GAAP measures that exclude certain items in order to better assess operating performance and help investors compare results with our previous guidance. This document also references "free cash flow", a non-GAAP measure, which the Company defines as cash flow from operations less additions to property, plant and equipment and purchased software. The Company's non‐GAAP information is not necessarily comparable to the non‐GAAP information used by other companies. Non‐GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as a measure of the Company's profitability or liquidity. Readers should consider the types of events and transactions for which adjustments have been made. On January 1, 2024, the Company updated its definition of certain non-GAAP financial measures to exclude stock-based compensation expense.  The Company recast its fiscal 2023 non-GAAP financial measures to present this information on a consistent basis. See the reconciliation table below. Benchmark Electronics, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Amounts in Thousands, Except Per Share Data) (UNAUDITED) Three Months Ended March 31, 2024 2023 Sales $ 675,575 $ 694,695 Cost of sales 608,167 630,737 Gross profit 67,408 63,958 Selling, general and administrative expenses 37,332 38,198 Amortization of intangible assets 1,204 1,592 Restructuring charges and other costs 3,343 1,426 Income from operations 25,529 22,742 Interest expense (7,245) (6,450) Interest income 1,992 1,258 Other (expense) income, net (1,177)