Benchmark Electronics (BHE) Sidoti September Small-Cap Virtual Conference summary

Company overview and strategic direction

• Global EMS and precision technology provider nearing $3B in revenue, with 13,000 employees across 20 locations in the Americas, Europe, and Asia.

• Opened a new 233,000 sq ft facility in Penang, Malaysia, enhancing global service capabilities.

• Manufacturing is concentrated 52% in the Americas, 38% in Asia, and 10% in Europe, positioning well for nearshoring and reshoring trends.

• Transitioned from legacy high-volume mix to targeted high-complexity, regulated sectors over the past decade.

• Combined next-gen telco and advanced computing into the AC&C sector for greater transparency and internal alignment.

Customer portfolio and sector focus

• Key customers include AMAT, ASM, ASML (semi-cap), Stryker, Zoll, Edwards (medical), Fortive, Emerson, Trimble (industrials), and Thales, Honeywell, Raytheon, Moog (A&D).

• Strong in medical devices and equipment, with focus areas in fluid management, imaging, robotics, and diagnostics.

• A&D business benefits from long-term programs and strong relationships, with recent growth driven by improved supply and global demand.

• Advanced computing and next-gen telco sectors include partnerships with Lexmark, Thales, HPE, Viasat, Viavi, and Verizon.

• AI infrastructure exposure is indirect, mainly through semi-cap, industrial power management, and HPC.

Financial performance and guidance

• Outperformed gross and non-GAAP operating margin targets despite macro challenges; revenue growth below initial 10% CAGR forecast.

• Delivered $225M free cash flow over the last four quarters; 2024 guidance is over $120M.

• Inventory reduced by $38M sequentially and $157M year-over-year, supporting free cash flow.

• Increased dividends by 3% to $0.17 per share and continued share repurchases to offset dilution.

• Multi-year model targets $70–$90M free cash flow through 2025, with further inventory turn improvements expected.