Benchmark Electronics Reports 6% Decline in Q1 2025 Sales, Net Income Drops to $3.6 Million

Benchmark Electronics, Inc. reported a decline in financial performance for the first quarter of 2025, with total sales of $631.8 million, down 6% from $675.6 million in the same period last year. The decrease was attributed primarily to lower revenues in the Medical and Advanced Computing and Communications (AC&C) sectors, which saw declines of 10% and 50%, respectively. However, the company experienced growth in the Semiconductor Capital Equipment (Semi-Cap) sector, which increased by 18%, and Aerospace and Defense (A&D), which rose by 15%. Gross profit also fell to $63.2 million, a decrease of 6% compared to $67.4 million in the prior year, maintaining a gross profit margin of 10%.

The company's net income for the quarter was $3.6 million, or $0.10 per diluted share, a significant drop from $14.0 million, or $0.38 per diluted share, reported in the first quarter of 2024. This decline in profitability was influenced by increased restructuring charges and other costs, including a $10.1 million settlement related to a tax assessment. Income from operations decreased by 54% to $11.8 million, primarily due to lower sales and higher restructuring expenses. The effective tax rate for the quarter was notably high at 56.6%, compared to 26.7% in the previous year, largely due to losses in jurisdictions where no tax benefits can be recognized.

In terms of operational developments, Benchmark Electronics reported a total of 36,096 shares outstanding as of March 31, 2025, with a slight increase in the number of shares compared to the previous quarter. The company repurchased 0.2 million shares for $8.0 million during the quarter, reflecting its ongoing commitment to return capital to shareholders. Additionally, cash, cash equivalents, and restricted cash totaled $355.3 million, an increase from $315.2 million at the end of 2024, indicating improved liquidity.

Looking ahead, Benchmark Electronics remains cautious about market conditions, particularly in light of ongoing supply chain challenges and fluctuating customer demand. The company plans to continue focusing on its core markets, including A&D and Semi-Cap, while managing costs and capital resources effectively. The management expressed confidence in its ability to meet liquidity requirements over the next 12 months, supported by existing cash balances and operational cash flows. However, they acknowledged the potential for increased capital needs if significant acquisitions are pursued in the future.