0000863436false 0000863436 2020-04-29 2020-04-29

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

 

FORM 8-K

 

 

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 29, 2020

 

 

 

 

BENCHMARK ELECTRONICS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

Texas

(State or other jurisdiction

of incorporation)

1-10560

(Commission

File Number)

74-2211011

(I.R.S. Employer

Identification No.)

 

56 South Rockford Drive, Tempe, Arizona 85281

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: (623) 300-7000

 

Not Applicable

(Former name or former address, if changed since last report)

 

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.10 per share

BHE

New York Stock Exchange, Inc.

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 


 

Item 2.02. Results of Operations and Financial Condition.

 

On April 29, 2020, Benchmark Electronics, Inc. (the “Company”) issued a press release announcing its results of operations for the quarter ended March 31, 2020. A copy of the press release and accompanying investor presentation are attached hereto as Exhibits 99.1 and 99.2, respectively, and incorporated by reference herein. The information disclosed under this Item 2.02, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In response to uncertainties related to the impact of the COVID-19 virus and in connection with other expense reduction actions being taken by our management team, on April 29, 2020, the Company announced a temporary 10% salary reduction for all executive officers (including our named executive officers) effective April 27, 2020 through December 31, 2020. In addition, the Company Board of Directors approved a temporary 10% reduction in their quarterly cash compensation effective April 27, 2020 through December 31, 2020.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.

 

Description

99.1

Press release, dated April 29, 2020

 

 

 

99.2

Investor presentation, dated April 29, 2020

 

 

 

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

-1-

 


 

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

BENCHMARK ELECTRONICS, INC.

 

Date: April 30, 2020

By: /s/ Stephen J. Beaver

 

Stephen J. Beaver, Esq.

 

Vice President General Counsel

 

 

 

-2-

 

 

Exhibit 99.1

FOR IMMEDIATE RELEASE

 

BENCHMARK REPORTS FIRST QUARTER 2020 RESULTS

 

·         Quarterly revenue of $515 million

·         Semi-Cap revenue growth of 25% year-over-year

·         A&D revenue growth of 15% year-over-year

·         Medical revenue growth of 14% year-over-year

·         Quarterly GAAP diluted EPS of $0.10 and non-GAAP diluted EPS of $0.22

 

TEMPE, AZ, April 29, 2020 – Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the first quarter ended March 31, 2020

 

 

 

Three Months Ended

 

 

Mar 31,

 

 

Dec 31,

 

Mar 31,

In millions, except EPS

2020

 

 

2019

 

2019

Sales

$515

 

 

$508

 

$603

Net income (loss)

$4

 

 

$(7)

 

$14

Net income – non-GAAP(1)

$8

 

 

$10

 

$13

Diluted earnings (loss) per share

$0.10

 

 

$(0.19)

 

$0.34

Diluted EPS – non-GAAP(1)

$0.22

 

 

$0.27

 

$0.33

Operating margin

1.3%

 

 

(1.8)%

 

2.7%

Operating margin – non-GAAP(1)

2.3%

 

 

2.6%

 

2.9%

 

(1) A reconciliation of GAAP and non-GAAP results is included below.

 

"I want to thank our extraordinary team for their hard work to deliver our results for the first quarter.  While adhering to safety and government guidelines, we were able to navigate a very difficult start to the year that began with challenges in our Suzhou, China facility early in the quarter and then migrated to our global locations in late March,” said Jeff Benck, Benchmark President and CEO.

 

 “Looking ahead, while we are not immune to the economic impacts created by COVID-19 and the associated labor and supply chain challenges, we expect continued strength in Medical, Defense, and Semi-cap sectors as compared to our other vertical markets.  We continue to play a key role in the COVID-19 fight with a number of products we design, test, and manufacture in the Medical sector that directly support efforts to battle this disease.  Our teams also continue to build essential products supporting the energy, semiconductor, security, and defense markets.”

 

“We remain in close contact with our customers, monitoring their end markets and the ever-changing labor and supply chain conditions.  We are proactively deploying a number of prioritized cost and cash management actions to reduce expenses and conserve cash during this period of uncertainty.  We have a strong balance sheet and I have the utmost confidence in the Benchmark global team to manage through these challenging times and emerge stronger as we focus on meeting the priority needs of our customers.”

 

Cash Conversion Cycle

 

1 


 

 

Mar 31,

 

 

 

Dec 31,

 

 

 

Mar 31,

 

 

 

2020

 

 

 

2019

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

Accounts receivable days

 

56

 

 

 

57

 

 

 

61

 

Contract asset days

 

28

 

 

 

29

 

 

 

23

 

Inventory days

 

65

 

 

 

60

 

 

 

51

 

Accounts payable days

 

(61)

 

 

 

(58)

 

 

 

(60)

 

Customer deposits

 

(7)

 

 

 

(7)

 

 

 

(3)

 

Cash Conversion Cycle days  

 

81

 

 

 

81

 

 

 

72

 

 

 

First Quarter 2020 Industry Sector Update

Revenue and percentage of sales by industry sector (in millions) was as follows.

 

 

 

Mar 31,

 

 

 

Dec 31,

 

 

 

Mar 31,

 

 

Higher-Value Markets

 

2020

 

 

 

2019

 

 

2019

Medical

$

118

 

23

%

 

$

103

 

20

%

 

$

103

 

17

%

Semi-Cap

 

83

 

16

 

 

 

81

 

16

 

 

 

66

 

11

 

A&D

 

119

 

23

 

 

 

106

 

21

 

 

 

104

 

17

 

Industrials

 

103

 

20

 

 

 

107

 

21

 

 

 

116

 

20

 

 

 

$

423

 

82

%

 

$

397

 

78

%

 

$

389

 

65

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mar 31,

 

 

 

Dec 31,

 

 

 

Mar 31,

 

 

Traditional Markets

 

2020

 

 

 

2019

 

 

2019

Computing

$

36

 

7

%

 

$

45

 

9

%

 

$

124

 

21

%

Telecommunications

 

56

 

11

 

 

 

66

 

13

 

 

 

90

 

14

 

 

 

$

92

 

18

%

 

$

111

 

22

%

 

$

214

 

35

%

 

Total

$

515

 

100

%

 

$

508

 

100

%

 

$

603

 

100

%

 

Overall, higher-value market revenues during the first quarter were up 6% quarter-over-quarter and 8% year-over-year due to stronger demand despite labor and supply chain challenges related to COVID-19 which occurred late in the quarter.  Traditional market revenues were down 57% year-over-year primarily from our exit of the legacy computing contract.

 

Second Quarter 2020 Outlook

Due to the effects of the COVID-19 pandemic and the unpredictable impact on our operations due to government enacted plant shut downs and shelter in place restrictions, particularly in our Tijuana, Mexico, Penang, Malaysia, and California operations as well as supply chain impacts, we are unable to forecast with certainty the effect on Benchmark’s financial and operational results for the second quarter of 2020.

 

First Quarter 2020 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 until Wednesday, May 6, 2020 on the Company's website.

2 


 

About Benchmark Electronics, Inc.

Benchmark provides comprehensive solutions across the entire product life cycle; 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: commercial aerospace, defense, advanced computing, next generation telecommunications, complex industrials, medical, and semiconductor capital equipment. Benchmark's global operations include facilities in seven countries and its common shares trade on the New York Stock Exchange under the symbol BHE.

 

For More Information, Please Contact:

Lisa K. Weeks, VP of Strategy & Investor Relations

623-300-7052 or [email protected]

 

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "estimate," "anticipate," "could", "predict" and similar expressions, and the negatives thereof, often identify forward-looking statements, which are not limited to historical facts. Forward-looking statements include, among other things, the estimated financial impact of the COVID-19 pandemic, guidance for second quarter 2020 results, the company’s anticipated plans and responses to the COVID-19 pandemic, statements, express or implied, concerning future operating results or margins, the ability to generate sales and income or cash flow, and expected revenue mix; and Benchmark’s business and growth strategies. Although the company believes these statements are based upon reasonable assumptions, they involve risks and uncertainties relating to operations, markets and the business environment generally.  These statements also depend on the duration and severity of the COVID-19 pandemic and related risks, including government and other third-party responses to it and the consequences for the global economy, our business and the businesses of our suppliers and customers.  Events relating to or resulting from the COVID-19 crisis, including the possibility of customer demand fluctuations, supply chain constraints, or the ability to utilize our manufacturing facilities at sufficient levels to cover our 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 to respond to the COVID-19 pandemic.  If one or more of these risks or uncertainties materializes, or underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Readers are advised to consult further disclosures on these risks and uncertainties, particularly in Part 1, Item 1A, "Risk Factors" of the company's Annual Report on Form 10-K for the year ended December 31, 2019 and in its subsequent filings with the Securities and Exchange Commission. All forward-looking statements included in this document are based upon information available to the company as of the date of this document, and it assumes no obligation to update them.

 

Non-GAAP Financial Measures

Management discloses non‐GAAP information to provide investors with additional information to analyze the Companys performance and underlying trends. Management uses nonGAAP 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, which the Company

3 


defines as cash flow from operations less additions to property, plant and equipment and purchased software.   The Companys nonGAAP information is not necessarily comparable to the nonGAAP information used by other companies.   NonGAAP 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 Companys profitability or liquidity.   Readers should consider the types of events and transactions for which adjustments have been made.

 

###

4 


Benchmark Electronics, Inc. and Subsidiaries

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP to Non-GAAP Financial Results

 

(Amounts in Thousands, Except Per Share Data)

 

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

December 31,

 

March 31,

 

 

 

 

2020

 

2019

 

2019

 

 

 

 

 

 

 

 

Income (loss) from operations (GAAP)

$

6,490

$

(9,281)

$

16,087

 

Restructuring charges and other costs

 

1,908

 

9,949

 

1,576

 

Settlement

 

-

 

(773)

 

-

 

Impairment

 

1,007

 

-

 

-

 

Customer insolvency (recovery)

 

-

 

11,036

 

(2,742)

 

Amortization of intangible assets

 

2,381

 

2,366

 

2,367

 

Non-GAAP income from operations

$

11,786

$

13,297

$

17,288

 

 

 

 

 

 

 

 

 

 

Gross Profit (GAAP)

$

43,361

$

37,313

$

50,037

 

Settlement

 

-

 

(773)

 

-

 

Customer insolvency (recovery)

 

-

 

967

 

(1,024)

 

Non-GAAP Gross Profit

$

43,361

$

37,507

$

49,013

 

 

 

 

 

 

 

 

 

 

Net income (loss) (GAAP)

$

3,852

$

(6,931)

$

13,773

 

Restructuring charges and other costs

 

1,908

 

9,949

 

1,576

 

Customer insolvency (recovery)

 

-

 

11,036

 

(2,742)

 

Amortization of intangible assets

 

2,381

 

2,366

 

2,367

 

Settlement

 

-

 

(773)

 

(1,836)

 

Impairment

 

1,007

 

-

 

-

 

Income tax adjustments(1)

 

(1,078)

 

(5,385)

 

206

 

Non-GAAP net income

$

8,070

$

10,262

$

13,344

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

Diluted (GAAP)

$

0.10

$

(0.19)

$

0.34

 

 

Diluted (Non-GAAP)

$

0.22

$

0.27

$

0.33

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares used

 

 

 

 

 

 

 

 in calculating earnings (loss) per share:

 

 

 

 

 

 

 

 

Diluted (GAAP)

 

37,071

 

36,928

 

40,853

 

 

Diluted (Non-GAAP)

 

37,071

 

37,374

 

40,853

 

(1)               This amount represents the tax impact of the non-GAAP adjustments using the applicable effective tax rates.

5 


Benchmark Electronics, Inc. and Subsidiaries

 

 

 

 

 

 

 

 

Consolidated Statements of Income

 

(Amounts in Thousands, Except Per Share Data)

 

(UNAUDITED)

 

 

 

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

2020

 

2019

 

 

 

 

 

 

Sales

$

514,964

$

602,820

 

Cost of sales

 

471,603

 

552,783

 

 

Gross profit

 

43,361

 

50,037

 

Selling, general and administrative expenses

 

31,575

 

30,007

 

Amortization of intangible assets

 

2,381

 

2,367

 

Restructuring charges and other costs

 

2,915

 

1,576

 

 

Income from operations

 

6,490

 

16,087

 

Interest expense

 

(1,702)

 

(1,609)

 

Interest income

 

599

 

1,297

 

Other income (expense), net

 

(662)

 

1,604

 

 

Income before income taxes

 

4,725

 

17,379

 

Income tax expense

 

873

 

3,606

 

 

Net income

$

3,852

$

13,773

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

Basic

$

0.10

$

0.34

 

 

Diluted

$

0.10

$

0.34

 

 

 

 

 

 

 

 

Weighted-average number of shares used in calculating

 

 

 

 

 

  earnings per share:

 

 

 

 

 

 

Basic

 

36,790

 

40,630

 

 

Diluted

 

37,071

 

40,853

 

 

For comparative purposes, certain prior year amounts have been reclassified to conform to the current year presentation.

6 


 

 

 

 

 

 

 

 

 

 

Benchmark Electronics, Inc. and Subsidiaries

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

(UNAUDITED)

(in thousands)

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

411,786

 

$

363,956

 

 

Accounts receivable, net

 

317,862

 

 

324,424

 

 

Contract assets

 

159,962

 

 

161,061

 

 

Inventories

 

338,437

 

 

314,956

 

 

Other current assets

 

36,955

 

 

30,685

 

 

 

 

Total current assets

 

1,265,002

 

 

1,195,082

 

Property, plant and equipment, net

 

201,580

 

 

205,819

 

Operating lease right-of-use assets

 

77,033

 

 

76,859

 

Goodwill and other, net

 

279,767

 

 

282,114

 

 

 

 

Total assets

$

1,823,382

 

$

1,759,874

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Current installments of long-term debt and finance lease obligations

$

8,868

 

$

8,825

 

 

Accounts payable

 

315,729

 

 

302,994

 

 

Accrued liabilities

 

134,742

 

 

147,426

 

 

 

 

Total current liabilities

 

459,339

 

 

459,245

 

Long-term debt and finance lease obligations, less current installments

 

231,798

 

 

138,912

 

Operating lease liabilities

 

67,009

 

 

67,898

 

Other long-term liabilities

 

75,614

 

 

78,987

 

Shareholders’ equity

 

989,622

 

 

1,014,832

 

 

 

 

Total liabilities and shareholders’ equity

$

1,823,382

 

$

1,759,874

 

 

7 


 

 

 

 

 

 

 

 

 

 

Benchmark Electronics, Inc. and Subsidiaries

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Cash Flows

(in thousands)

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

$

3,852

 

$

13,773

 

Depreciation and amortization

 

12,192

 

 

12,172

 

Stock-based compensation expense

 

2,739

 

 

2,772

 

Accounts receivable, net

 

6,414

 

 

64,176

 

Contract assets

 

1,099

 

 

(16,943)

 

Inventories

 

(23,769)

 

 

(5,862)

 

Accounts payable

 

14,882

 

 

(45,914)

 

Other changes in working capital and other, net

 

(20,518)

 

 

(7,760)

 

 

Net cash (used in) provided by operations

 

(3,109)

 

 

16,414

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Additions to property, plant and equipment and software

 

(12,896)

 

 

(10,074)

 

Other investing activities, net

 

1,405

 

 

(97)

 

 

Net cash used in investing activities

 

(11,491)

 

 

(10,171)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Share repurchases

 

(19,329)

 

 

(61,080)

 

Net debt activity

 

92,813

 

 

(274)

 

Other financing activities, net

 

(6,946)

 

 

(7,160)

 

 

Net cash provided by (used in) financing activities

 

66,538

 

 

(68,514)

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes

 

(4,108)

 

 

(515)

Net increase (decrease) in cash and cash equivalents

 

47,830

 

 

(62,786)

 

Cash and cash equivalents at beginning of year

 

363,956

 

 

458,102

 

Cash and cash equivalents at end of period

$

411,786

 

$

395,316

 

 

 

 

 

 

 

 

 

 

 

8 


Exhibit 99.2

 

 

| 1 Q1 - 20 Earnings Call April 29, 2020

 
 

| 2 | 2 This press release contains forward - looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "estimate," "anticipate," "could" "predict" and similar expressions, and the negatives thereof, often identify forward - looking statements, which are not limited to historical facts. Forward - looking statements include, among other things, the estimated financial impact of the COVID - 19 pandemic, guidance for second quarter 2020 results, the company’s anticipated plans and responses to the COVID - 19 pandemic, statements, express or implied, concerning future operating results or margins, the ability to generate sales and income or cash flow, and expected revenue mix; and Benchmark’s business and growth strategies. Although the company believes these statements are based upon reasonable assumptions, they involve risks and uncertainties relating to operations, markets and the business environment generally. These statements also depend on the duration and severity of the COVID - 19 pandemic and related risks, including government and other third - party responses to it and the consequences for the global economy, our business and the businesses of our suppliers and customers. Events relating to or resulting from the COVID - 19 crisis, including the possibility of customer demand fluctuations, supply chain constraints, or the ability to utilize our manufacturing facilities at sufficient levels to cover our 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 to respond to the COVID - 19 pandemic. If one or more of these risks or uncertainties materializes, or underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Readers are advised to consult further disclosures on these risks and uncertainties, particularly in Part 1, Item 1A, "Risk Factors" of the company's Annual Report on Form 10 - K for the year ended December 31, 2019 and in its subsequent filings with the Securities and Exchange Commission. All forward - looking statements included in this document are based upon information available to the company as of the date of this document, and it assumes no obligation to update them. This document includes certain financial measures that exclude items and therefore are not in accordance with U.S. generally accepted accounting principles (“GAAP”). A detailed reconciliation between GAAP results and results excluding special items (“non - GAAP”) is included in the Appendix of 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 discloses non-GAAP information to provide investors with additional information to analyze the Company’s performance and underlying trends. 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”, 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. Forward - Looking Statements Non - GAAP Financial Information

 
 

| 3  Senior Leadership Team daily coordination to prioritize actions, resolve escalations, and provide guidance  COVID - 19 daily task force responds to operational issues and shares best practices (site safety protocols, employee needs, etc.) ‒ Enacted centralized operational protocols ‒ Leads regular communication cadence for all employees, suppliers, and customers  Established work flow to review/comply with government decrees ‒ Evaluation of ever - changing government requirements and regulations  Customer coordination on flow down of essential critical infrastructure requirements by the U.S. Depart of Homeland Security and foreign governments  Site coordination of critical infrastructure and essential services approvals and certifications  Playbook for each locale to remain in compliance Benchmark Response to COVID - 19 Global Pandemic Mobilized emergency response protocols: Priority is creating a safe work environment for our employees Committed to Delivering For Our Customers While Keeping Our Teams Safe

 
 

| 4 Status of Operations Asia Europe U.S. Mexico • Varied impacts throughout U.S. operations due to state shelter in place guidelines • California operations impacted in late March returning to full operations end of April • China returned to full operations mid - March • Malaysia operations impacted in late March and operated between 30% to 50% capacity through April • Locations in Tijuana, Baja temporarily shut down by government mandate, pending State approval to resume operations • Guadalajara operating at 75% capacity due to at risk employee regulations Region Operational Status • Limited impacts to European operations  Enhanced cleaning protocols and producing protective gear in Thailand for Benchmark sites  Social distancing policies supported by manufacturing reconfigurations  Sites closed to visitors and extremely restrictive travel policies  Employee policy updates (sick leave, work from home, etc.) and quarantine protocols established  Six confirmed Benchmark employees with COVID - 19 Safety Protocols aligned to CDC, WHO, and local government guidelines Daily Global Task Force Focus on Employee Safety

 
 

| 5 Helping Support the Fight Against COVID - 19 ▪ Twelve COVID - 19 related programs ▪ 7 screening and testing devices ‒ X - Ray, MRI, and Ultrasound ‒ POC COVID - 19 quick test device ‒ POC Sepsis testing device ▪ 2 therapeutic fluid delivery devices ▪ 3 sites supporting ventilator programs ▪ Engineering and manufacturing support ▪ Rapid prototyping and production ramps Assisting leading medical device companies in the front line fight Diagnostic Imaging Handheld Devices Ventilators Fluid Management and Testing

 
 

| 6 Roop Lakkaraju Chief Financial Officer

 
 

| 7 First Quarter 2020 Overview  Achieved revenue of $515 million ‒ Against a backdrop of mandatory facility shutdowns and component constraints ‒ Strong demand in Semi - Cap, Medical, and Defense sectors  Realized gross margins of 8.4% and earnings per share of $0.22  Maintained cash conversion cycle at 81 days  Used $3 million of cash in operations  Returned ~$25 million of cash to shareholders ‒ Share buybacks of $19 million

 
 

| 8 Revenue by Mix and Market Sector For the Three Months Ended Higher - Value Markets Mar. 31 , 2020 Dec. 31 , 2019 Q/Q Mar. 31 , 2019 Y/Y Medical 23% $118 20% $103 15% 17% $103 14% Semi - Cap 16% $83 16% $81 2% 11% $66 25% Aerospace & Defense 23% $119 21% $106 13% 17% $104 15% Industrials 20% $103 21% $107 (4%) 20% $116 (12%) Total Mix and Revenue 82% $423 78% $397 6% 65% $389 8% Dollars in millions Traditional Markets Mar. 31 , 2020 Dec. 31 , 2019 Q/Q Mar. 30 , 2019 Y/Y Computing 7% $36 9% $45 (18%) 21% $124 (71%) Telecommunications 11% $56 13% $66 (16%) 14% $90 (37%) Total Mix and Revenue 18% $92 22% $111 (17%) 35% $214 (57%)

 
 

| 9 First Quarter 2020 Financial Summary (GAAP) See APPENDIX 1 for a reconciliation of GAAP to non - GAAP Financial Results For the Three Months Ended (In millions, except EPS) Mar. 31 , 2020 Dec. 31 , 2019 Q/Q Mar. 31 , 2019 Y/Y Net Sales $515 $508 1.3% $603 (15%) GAAP Gross Margin 8.4% 7.3% 110 bps 8.3% 10 bps GAAP SG&A $31.6 $34.3 (7.8)% $30.0 5.3% GAAP Operating Margin 1.3% (1.8%) 310 bps 2.7% (140 bps) GAAP Diluted EPS $0.10 ($0.19) >(100%) $0.34 (71%) GAAP ROIC 2.0% 2.9% (90 bps) 5.7% (370 bps) GAAP ROIC = (GAAP TTM income from operations – GAAP Tax Impact) ÷ (Average Invested Capital for last 5 quarters)

 
 

| 10 First Quarter 2020 Financial Summary (Non - GAAP) For the Three Months Ended (In millions, except EPS) Mar. 31 , 2020 Dec. 31 , 2019 Q/Q Mar. 31 , 2019 Y/Y Net Sales $515 $508 1.3% $603 (15%) Non - GAAP Gross Margin 8.4% 7.4% 100 bps 8.1% 30 bps Non - GAAP SG&A $31.6 $24.2 30.6% $31.7 (0.3%) Non - GAAP Operating Margin 2.3% 2.6% (30 bps) 2.9% (60 bps) Non - GAAP Diluted EPS $0.22 $0.27 (18%) $0.33 (33%) Non - GAAP ROIC 7.1% 7.4% (30 bps) 8.3% (120 bps) See APPENDIX 1 for a reconciliation of GAAP to non - GAAP Financial Results Non - GAAP ROIC = (Non - GAAP TTM income from operations – Non - GAAP Tax Impact) ÷ [Average Invested Capital for last 5 quarters]

 
 

| 11 Cash (In millions) Mar. 31 , 2020 Dec. 31 , 2019 Mar. 31, 2019 Cash Flows from (used in) Operations $(3) $36 $16 FCF (1) $(16) $27 $6 Cash $412 $364 $395 International $189 $198 $165 US $223 $166 $230 Cash Flow / Balance Sheet Summary For the Three Months Ended (1) Free cash flow (FCF) defined as net cash provided by (used in) operations less capex  Net positive cash position  Flexible and conservative capital structure  CARES Act implementation; deferral of social security tax payments until 2021/2022  Existing credit facility includes term loan and revolving line of credit  Credit facility matures July 20, 2023  Current leverage ratio* in compliance with debt covenants Debt Structure Senior Secured Term Loan $143 Revolving Credit Facility Drawn Amount $95 * Leverage ratio is Net debt/LTM adjusted EBITDA, as defined in the credit facility, which are non - GAAP measures

 
 

| 12 Working Capital Update Q1 - 18 Q2 - 18 Q3 - 18 Q4 - 18 Q1 - 19 Q2 - 19 Q3 - 19 Q4 - 19 Q1 - 20 Accounts Receivable Days 59 61 64 64 61 54 56 57 56 Contract Asset Days 22 20 22 19 23 23 26 29 28 Inventory Days 50 47 49 46 51 52 56 60 65 Deposits 3 2 4 4 3 3 7 7 7 Accounts Payable Days 60 57 57 63 60 60 52 58 61 Cash Conversion Cycle 68 69 74 62 72 66 79 81 81 Excluding the legacy computing contract, the updated CCC target is 78 to 83 days 68 69 74 62 72 66 79 81 81 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20

 
 

| 13 Capital Allocation Update Dividends  Quarterly dividend of $0.15 per share totaling $5.5 million paid in January 2020  Recurring quarterly dividend increased by 6.7% to $0.16 per share and paid to shareholders as of March 31, 2020 on April 14, 2020  Recurring quarterly dividends to continue until further notice Share Repurchases  Share repurchases of $19 million completed in Q1 2020  Share repurchase program expanded by $150 million; remaining authorization to repurchase shares of $210 million at March 31, 2020  No share repurchases planned in the second quarter

 
 

| 14 Jeff Benck President & Chief Executive Officer

 
 

| 15 End Market Demand Outlook by Sector Most significant variables in Q2 revenue - operations and supply chain support for demand Medical Semi - Cap Defense Aerospace Industrial Computing/ Telco • Volume remains strong for existing products and new ramps, COVID - 19 related systems and devices should provide upside • Stable demand in defense (represents ~70% of sector revenues) • Operational/supply chain challenges in the near term • Strong demand outlook based on continued semi - cap recovery • Operational/supply chain challenges in the near term, demand high • Outlook mixed; expected variability in demand across sub - sectors • Mixed demand; data center related products and telco infrastructure flat; satellite communication improving • Operational/supply chain challenges in the near term Market Demand Sector Comments • Significant decline in commercial aerospace related revenues Q2 - 20 Revenue Outlook 2H - 20 Revenue Outlook

 
 

| 16 Notable New Business Wins Continue Medical  Portable ultrasound electronics & systems ( mfg.)  Automated drug freezer (design)  Portable mobile imaging ( process design & mfg.) Semi - Cap  Front - end semi - cap in - chamber tool (precision technologies)  Semi - cap tool electronic controllers (design & mfg.) Aerospace & Defense  Flight recorder electronics (process design & mfg.)  Munition electronics (mfg.) Industrials  Vehicle tracking & diagnostics (mfg.)  Artificial Intelligence enabled LiDAR Scanner (design & mfg.) Computing & Telco  High - performance computing (process design & mfg.)  Fiber optics tester (design) Epic Award for Excellence in Innovation, Engineering, Design, & Development  Awarded to Benchmark Secure Technology (partner since 2002)  Ruggedized design and manufacturing or a multi - domain data router for situational awareness Automation Solutions Service Excellence Award for Quality and Delivery  Award to Benchmark Malaysia and Thailand operations (partners since 2001)  Successful certification for manufacturing explosive proof equipment for delivery to Europe and Asia

 
 

| 17 Updated “Guideposts” Suspending quarterly guidance due to current environment  2Q Revenue: Expect modest sequential quarterly revenue decline; varied operational impacts as a result of labor and supply chain constraints; timing of government actions pending to permit factories to return to higher production levels (particularly in Mexico)  Full Year Revenue: Expect second quarter to be lowest revenue quarter in 2020; still expect higher - value markets >80% of revenue and potential for annual growth in Medical, Semi - Cap, and A&D  Margins: Expect sequential quarterly margin decline; Q2 challenged from lower revenues, inefficient utilization of facilities, expense increases, and supply chain constraints due to COVID - 19; expect to recover to 9% gross margin range in second half of 2020  Expenses: Proactive cost management planning for Q2 and out quarters if pandemic recovery is elongated; levers include compensation adjustments, merit delays, employee furloughs, travel, and discretionary professional services reductions  Investments: Maintaining critical investments in resources and capabilities given our demand outlook and new program ramps from wins in the past 24 months

 
 

| 18 Unchanged: Key Strategic Initiatives Staying focused on longer term horizon  Change the relationship with our customers; differentiate with technology  Revenue at the right target margin profile Focus on the Customer  Be the best at what we do  Effective asset utilization and margin expansion Drive Enterprise Efficiencies  Invest in People, Process, and Solutions  Revenue growth and margin expansion Growing our Business  Drive empowerment, accountability, and ownership  High functioning teams in a great workplace Engage Talent and Shift Culture

 
 

| 19 Appendix

 
 

| 20 (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) APPENDIX 1 - Reconciliation of GAAP to non - GAAP Financial Results  This amount represents the tax impact of the non - GAAP adjustments using the applicable effective tax rates.

 
 

| 21 (Amounts in Thousands) – (UNAUDITED) APPENDIX 2 - Reconciliation of GAAP to Non - GAAP Financial Measures Three Months Ended Mar. 31 , 2020 Dec. 31 , 2019 Mar. 31, 2019 GAAP Gross Profit $43,361 $37,313 $50,037 Settlement - (773) - Customer insolvency (recovery) - 967 (1,024) Non - GAAP Gross Profit $43,361 $37,507 $49,013 GAAP SG&A Expenses $31,575 $34,281 $30,007 Customer insolvency (recovery) - 10,069 (1,718) Non - GAAP SG&A Expenses $31,575 $24,212 $31,725

 
 

| 22 (Amounts in Thousands) – (UNAUDITED) APPENDIX 3 - Reconciliation of Free Cash Flow Three Months Ended Mar. 31 , 2020 Dec. 31 , 2019 Mar. 31, 2019 Net Cash Provided by (Used in) Operations $(3,109) $35,822 $16,414 Additions to property, plant and equipment and software (12,896) (9,176) (10,074) Free Cash Flow (Free Cash Flow Used) $(16,005) $26,646 $6,340