BENCHMARK ELECTRONICS INC

Previous wording

The financial information and the discussion below should be read in conjunction with other information, including the unaudited condensed consolidated financial statements and Notes in Part I, Item 1 of this quarterly report on Form 10-Q for the quarterly period ended March 31, 2024 (this Report), the consolidated financial statements appearing in the Company’s annual report on Form 10-K for the year ended December 31, 2023 (the 2023 10-K), and Part I, Item 1A, Risk Factors of the 2023 10-K. In this Report, references to Benchmark, the Company or use of the words “we,” “our” and “us” include Benchmark's subsidiaries unless otherwise noted.

Current wording

The financial information and the discussion below should be read in conjunction with other information, including the unaudited condensed consolidated financial statements and Notes thereto in Part I, Item 1 of this quarterly report on Form 10-Q for the quarterly period ended June 30, 2024 (this Report), the consolidated financial statements appearing in the Company’s annual report on Form 10-K for the year ended December 31, 2023 (the 2023 10-K), and Part I, Item 1A, Risk Factors of the 2023 10-K. In this Report, references to Benchmark, the Company or use of the words “we,” “our” and “us” include Benchmark’s subsidiaries unless otherwise noted.

Previous wording

This Report 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 (Exchange Act). 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 quarterly periods or 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 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 2023 10-K and in any of the Company’s subsequent reports filed with the Securities and Exchange Commission (SEC). 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, the ability to utilize the Company’s manufacturing facilities at sufficient levels to cover its fixed operating costs, or write-downs or write-offs of obsolete or unsold inventory, 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.

Current wording

This Report 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 (the Exchange Act). 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 quarterly periods or 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 2023 10-K and in any of the Company’s subsequent reports filed with the Securities and Exchange Commission (the SEC). 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, the ability to utilize the Company’s manufacturing facilities at sufficient levels to cover its fixed operating costs, or write-downs or write-offs of obsolete or unsold inventory, 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.

Previous wording

Benchmark Electronics, Inc. (the Company) is a Texas corporation that provides advanced manufacturing services (electronic manufacturing services (EMS) and precision technology (PT) services), which includes design and engineering services and technology solutions. From initial product concept to volume production, including direct order fulfillment and aftermarket services, we are a trusted integrated services partner to original equipment manufacturers (OEMs). Served markets include: semiconductor capital equipment (semi-cap), complex industrials, medical technologies, commercial aerospace and defense (A&D), advanced computing and next-generation communications. The Company has manufacturing operations located in the United States and Mexico (the Americas), Asia and Europe.

Current wording

Benchmark Electronics, Inc. (the Company) is a Texas corporation that provides advanced manufacturing services (electronic manufacturing services (EMS) and precision technology (PT) services), which includes design and engineering services and technology solutions. From initial product concept to volume production, including direct order fulfillment and aftermarket services, we are a trusted integrated services partner to original equipment manufacturers (OEMs). Served markets include: semiconductor capital equipment (semi-cap), complex industrials, medical technologies, commercial aerospace and defense (A&D), and advanced computing and communications (AC&C). The Company has manufacturing operations located in the United States and Mexico (the Americas), Asia and Europe.

Previous wording

Manufacturing Services, which include printed circuit board assemblies (PCBAs) using both traditional surface mount technologies and microelectronics, subsystem assembly, system build and integration. System builds and integration often involve building a finished assembly that includes PCBAs, complex subsystem assemblies, mechatronics, displays, mechanicals, and other components. These final products may be configured to order and delivered directly to the end customer across all the industries we serve. Manufacturing services also includes precision technology services comprised of precision machining, advanced metal joining and welding, cleaning, assembly and functional testing primarily for the semi-cap (serving semiconductor capital equipment customers) and A&D markets.

Current wording

Manufacturing Services, which include printed circuit board assemblies (PCBAs) using both traditional surface mount technologies and microelectronics, subsystem assembly, system build and integration. System builds and integration often involve building a finished assembly that includes PCBAs, complex subsystem assemblies, mechatronics, displays, mechanicals, and other components. These final products may be configured to order and delivered directly to the end customer across all the industries we serve. Manufacturing services also includes precision technology services comprised of precision machining, advanced metal joining and welding, cleaning, assembly and functional testing primarily for the semi-cap (serving semi-cap customers) and A&D markets.

Previous wording

Technology Solutions, which involve developing a library of building blocks or reference designs primarily in defense solutions, surveillance systems, millimeter wave radio frequency (RF) subsystems, and front-end managed connected data collection systems. We often partner with our customers to merge these solutions utilizing our engineering services to provide turnkey product development from requirements through the launch to volume production into our factories. Our building blocks can be utilized across a variety of industries, but we have significant focus and capabilities in the A&D, medical, next-generation communications, and the complex industrials markets. We have also developed differentiated capabilities in RF. The need to improve size, weight, and power to accommodate high frequency electronics communications is important to customers in the A&D, medical, and next-generation communications markets.

Current wording

Technology Solutions, which involve developing a library of building blocks or reference designs primarily in defense solutions, surveillance systems, millimeter wave radio frequency (RF) subsystems, and front-end managed connected data collection systems. We often partner with our customers to merge these solutions utilizing our engineering services to provide turnkey product development from requirements through the launch to volume production into our factories. Our building blocks can be utilized across a variety of industries, but we have significant focus and capabilities in the A&D, medical, advanced communications, and the complex industrials markets. We have also developed differentiated capabilities in RF. The need to improve size, weight, and power to accommodate high frequency electronics communications is important to customers in the A&D, medical, and advanced communications markets.

Previous wording

We employ enterprise resource planning (ERP) systems and lean manufacturing principles to manage procurement and manufacturing processes in an efficient and cost-effective manner so that, where possible, components arrive on a just-in-time, as-and-when-needed basis. Because we are a significant purchaser of electronic components and other raw materials, we are generally able to capitalize on the economies of scale associated with our relationships with suppliers to negotiate price discounts, obtain components and other raw materials that are in short supply, and return excess components. Utilizing our agility and expertise in supply chain management and our relationships with suppliers across the supply chain, we strive to help reduce our customers’ cost of goods sold and inventory exposure. However, due to global labor and supply disruptions, we continue to see component supply chain constraints across all commodity categories that are constraining our ability to produce the full demand forecasts we are receiving from customers.

Current wording

We employ enterprise resource planning (ERP) systems and lean manufacturing principles to manage procurement and manufacturing processes in an efficient and cost-effective manner so that, where possible, components arrive on a just-in-time, as-and-when-needed basis. Because we are a significant purchaser of electronic components and other raw materials, we are generally able to capitalize on the economies of scale associated with our relationships with suppliers to negotiate price discounts, obtain components and other raw materials that are in short supply, and return excess components. Utilizing our agility and expertise in supply chain management and our relationships with suppliers across the supply chain, we strive to help reduce our customers’ cost of goods sold and inventory exposure. However, due to global labor and supply disruptions, we continue to see component supply chain constraints across certain commodity categories that are constraining our ability to produce the full demand forecasts we are receiving from customers.

Previous wording

Sales for the three months ended March 31, 2024 were $675.6 million, a 3% decrease from sales of $694.7 million during the three months ended March 31, 2023. During the first quarter of 2024, sales to customers in our various industry sectors varied from the first quarter of 2023 as follows:

Current wording

Sales for the three months ended June 30, 2024 were $665.9 million, a 9% decrease from sales of $733.2 million during the three months ended June 30, 2023. During the second quarter of 2024, sales to customers in our various industry sectors varied from the second quarter of 2023 as follows:

Previous wording

A&D increased by 33%,

Current wording

A&D increased by 36%, and

Previous wording

The overall revenue decrease was primarily due to lower Medical and Next-Generation Communications revenue, due to general end demand softness. This was less than offset by increases in Semi-Cap and A&D revenue, as a result of higher demand from existing customers and end-demand strength in both defense and commercial aerospace subsectors. See “Results of Operations — Sales” discussion below.

Current wording

The overall revenue decrease was primarily due to lower Medical and AC&C revenue, due to general end demand softness. This was partially offset by an increase in Semi-Cap revenue, as a result of higher demand from existing customers. See “Results of Operations — Sales” discussion below.

Previous wording

Our sales depend on the success of our customers, some of which operate in businesses associated with rapid technological change and consequent product obsolescence. Developments adverse to our major customers or their products, the availability of electronic component supply, or the failure of a major customer to pay for components or services have adversely affected us by not allowing us to fulfill our total customer demand. A substantial percentage of our sales are made to a small number of customers, and the loss of a major customer, if not replaced, would adversely affect us. Sales to our ten largest customers represented 54% and 51% of our total sales during the three months ended March 31, 2024 and 2023, respectively. After a period of unprecedented global labor and supply disruptions, we have seen a general easing of certain material constraints across commodity categories, with the exception of older technologies where semiconductor original equipment manufacturers are not adding incremental capacity. The lack of capacity regarding these older technologies could constrain our ability to produce the full demand forecasts we are receiving from customers needing those parts. Lead times are also improving from the previous highs that prompted many suppliers to categorize some of their constrained components with non-cancellable and non-returnable business terms. Until recently, these constraints led to last-minute allocations and created inefficiencies in our operations, as well as increased costs to us and our customers.

Current wording

Our sales depend on the success of our customers, some of which operate in businesses associated with rapid technological change and consequent product obsolescence. Developments adverse to our major customers or their products, the availability of electronic component supply, or the failure of a major customer to pay for components or services have adversely affected us by not allowing us to fulfill our total customer demand. A substantial percentage of our sales are made to a small number of customers, and the loss of a major customer, if not replaced, would adversely affect us. Sales to our ten largest customers represented 53% and 52% of our total sales during the six months ended June 30, 2024 and 2023, respectively. After a period of unprecedented global labor and supply disruptions, we have seen a general easing of certain material constraints across commodity categories, with the exception of older technologies where semiconductor original equipment manufacturers are not adding incremental capacity. The lack of capacity regarding these older technologies could constrain our ability to produce the full demand forecasts we are receiving from customers needing those parts. Lead times are also improving from the previous highs that prompted many suppliers to categorize some of their constrained components with non-cancellable and non-returnable business terms. Until recently, these constraints led to last-minute allocations and created inefficiencies in our operations, as well as increased costs to us and our customers.

Previous wording

We have undertaken initiatives to restructure our business operations with the intention of improving utilization and reducing costs. During the three months ended March 31, 2024, we recognized $3.3 million of restructuring charges and other costs due to capacity and workforce reductions at our sites in the Americas. See “Results of Operations — Restructuring Charges and Other Costs”.

Current wording

We have undertaken initiatives to restructure our business operations with the intention of improving utilization and reducing costs. During the six months ended June 30, 2024, we recognized $4.8 million of restructuring charges and other costs due to capacity and workforce reductions primarily at our sites in the Americas. See “Results of Operations — Restructuring Charges and Other Costs”.

Previous wording

As noted above, sales for the first quarter of 2024 decreased 3% from the first quarter of 2023.

Current wording

As noted above, sales for the second quarter of 2024 decreased 9% from the second quarter of 2023.

Previous wording

The percentages of our sales by market sector were as follows:

Current wording

Sales by market sector were as follows:

Previous wording

Semi-Conductor Capital Equipment. First quarter of 2024 sales increased 12% to $165.9 million from $148.5 million in the first quarter of 2023. The increase was primarily due to stronger demand with existing customers.

Current wording

Semi-Conductor Capital Equipment. Second quarter of 2024 sales increased 5% to $171.9 million from $164.1 million in the second quarter of 2023. Sales during the first six months of 2024 increased 8% to $337.8 million from $312.6 million in the same period of 2023. The increases were primarily due to stronger demand with existing customers.

Previous wording

Our international operations are subject to the risks of doing business abroad. See Part I, Item 1A of our 2023 10-K for factors pertaining to our international sales, fluctuations in foreign currency exchange rates and a discussion of potential adverse effects in operating results associated with the risks of doing business abroad. During the three months ended March 31, 2024 and 2023, 58% and 59%, respectively, of our sales were from international operations.

Current wording

Our international operations are subject to the risks of doing business abroad. See Part I, Item 1A of our 2023 10-K for factors pertaining to our international sales, fluctuations in foreign currency exchange rates and a discussion of potential adverse effects in operating results associated with the risks of doing business abroad. During both the three months ended June 30, 2024 and 2023, 61% of our sales were from international operations. During the six months ended June 30, 2024 and 2023, 60% and 59%, respectively, of our sales were from international operations.

Previous wording

Americas. First quarter of 2024 sales decreased 6% to $372.3 million from $397.2 million in the first quarter of 2023. The decrease was primarily due to softness in the next-generation communications and complex industrials sectors partially offset by increased demand in the A&D sector.

Current wording

Americas. Second quarter of 2024 sales decreased 15% to $343.1 million from $404.2 million in the second quarter of 2023. Sales during the first six months of 2024 decreased 11% to $715.5 million from $801.4 million in the same period of 2023. The decreases were primarily due to softness in the semi-cap, medical and AC&C sectors partially offset by increased demand in the A&D sector.

Previous wording

Europe. First quarter of 2024 sales increased 3% to $80.5 million from $77.9 million in the first quarter of 2023. The increase was primarily due to high demand in the semi-cap and A&D sectors partially offset by a decrease in the complex industrials sector.

Current wording

Europe. Second quarter of 2024 sales increased 15% to $85.9 million from $74.6 million in the second quarter of 2023. Sales during the first six months of 2024 increased 9% to $166.4 million from $152.4 million in the same period of 2023. The increases were primarily due to higher demand in the semi-cap and A&D sectors partially offset by a decrease in the complex industrials sector.

Previous wording

Gross profit increased 5% to $67.4 million in the first quarter of 2024 from $64.0 million in the first quarter of 2023 primarily due to improved operational efficiencies and the proactive reduction actions taken by our manufacturing sites. Gross profit margin increased to 10.0% in the first quarter of 2024 from 9.2% in the first quarter of 2023 primarily due to improved operational efficiencies and the proactive cost reduction actions taken by our manufacturing sites.

Current wording

Gross profit increased 1% to $68.0 million in the second quarter of 2024 from $67.0 million in the second quarter of 2023. Gross profit increased 3% to $135.4 million in the first six months of 2024 from $131.0 million in the same period of 2023. The increases were primarily due to improved operational efficiencies and the proactive reduction actions taken by our manufacturing sites. Gross profit margin increased to 10.2% in the second quarter of 2024 from 9.1% in the second quarter of 2023. Gross profit margin increased to 10.1% in the first six months of 2024 from 9.2% in the first six months of 2023. The increases were primarily due to improved operational efficiencies and the proactive cost reduction actions taken by our manufacturing sites.

Previous wording

First quarter of 2024 income from operations increased 12% to $25.5 million from $22.7 million in the first quarter of 2023. The increase was primarily due to improved gross margin and cost actions taken to reduce selling, general and administrative (SG&A) expenses.

Current wording

Second quarter of 2024 income from operations increased 11% to $27.3 million from $24.5 million in the second quarter of 2023. During the first six months of 2024 income from operations increased 12% to $52.8 million from $47.2 million in the first six months of 2023. The increases were primarily due to improved gross margin and cost actions taken to reduce selling, general and administrative (SG&A) expenses.

Previous wording

Americas. First quarter of 2024 income from operations decreased 3% to $13.0 million from $13.3 million in the first quarter of 2023. The decrease was primarily due to lower revenue partially offset by cost control.

Current wording

Americas. Second quarter of 2024 income from operations decreased 12% to $12.2 million from $13.9 million in the second quarter of 2023. Sales during the first six months of 2024 decreased 8% to $25.2 million from $27.2 million in the same period of 2023. The decreases were primarily due to lower revenue partially offset by cost control.

Previous wording

Asia. First quarter of 2024 income from operations increased 17% to $33.8 million from $28.8 million in the first quarter of 2023. The increase was primarily due to cost control partially offset by lower revenue.

Current wording

Asia. Second quarter of 2024 income from operations increased 26% to $32.1 million from $25.6 million in the second quarter of 2023. Sales during the first six months of 2024 increased 21% to $65.9 million from $54.4 million in the same period of 2023. The increases were primarily due to cost control partially offset by lower revenue.

Previous wording

Europe. First quarter of 2024 income from operations increased 1% to $6.8 million from $6.7 million in the first quarter of 2023. The increase was primarily due to higher revenue and cost control.

Current wording

Europe. Second quarter of 2024 income from operations increased 97% to $6.6 million from $3.4 million in the second quarter of 2023. Sales during the first six months of 2024 increased 33% to $13.4 million from $10.0 million in the same period of 2023. The increases were primarily due to higher revenue and cost control.

Previous wording

SG&A expenses decreased to $37.3 million in the first quarter of 2024 from $38.2 million in the first quarter of 2023. The decrease was primarily due to cost actions taken, coupled with lower variable compensation expense.

Current wording

SG&A expenses increased to $38.0 million in the second quarter of 2024 from $37.7 million in the second quarter of 2023. The increase was primarily due to higher stock compensation expense. SG&A decreased to $75.4 million in the first six months of 2024 from $75.9 million in the same period of 2023. The decrease was primarily due to cost actions taken, coupled with lower variable compensation expense.

Previous wording

Amortization of intangible assets decreased to $1.2 million in the first quarter of 2024 from $1.6 million in the first quarter of 2023. The decrease was primarily due to certain intangible assets becoming fully amortized in 2023.

Current wording

Amortization of intangible assets decreased to $1.2 million in the second quarter of 2024 from $1.6 million in the second quarter of 2023. Amortization of intangible assets decreased to $2.4 million in the first six months of 2024 from $3.2 million in the same period of 2023. The decrease was primarily due to certain intangible assets becoming fully amortized in 2023.

Previous wording

During the first quarter of 2024, we recognized $3.3 million of restructuring charges and other costs primarily due to capacity and workforce reductions at our sites in the Americas.

Current wording

During the six months ended June 30, 2024, we recognized $4.8 million of restructuring charges and other costs primarily due to capacity and workforce reductions at our sites in the Americas.

Previous wording

During the first quarter of 2023, we recognized $1.4 million of restructuring charges and other costs primarily due to expenses associated with announced site closures or exits, reductions in workforce and other restructuring activities primarily in the Americas.

Current wording

During the six months ended June 30, 2023, we recognized $3.8 million of restructuring charges and other costs primarily due to expenses associated with announced site closures or exits, reductions in force and other restructuring activities primarily in the Americas. Additionally, during the second quarter of 2023, the Company made the decision to no longer continue certain manufacturing capabilities in the Americas. In connection with that decision, the Company assessed the facility and equipment assets used in those manufacturing capabilities using valuation information from third parties and recorded $0.9 million of impairment charges as a result of that assessment. The asset impairment charges are included in the restructuring charges and other costs line item on the consolidated statements of income as of June 30, 2023.

Previous wording

Interest income increased to $2.0 million in the first quarter of 2024 from $1.3 million in the first quarter of 2023. The increase was primarily due to higher interest rates.

Current wording

Interest income increased to $2.5 million in the second quarter of 2024 from $1.6 million in the second quarter of 2023. Interest expense increased to $4.5 million in the first six months of 2024 from $2.9 million in the same period of 2023. The increase was primarily due to higher interest rates.

Previous wording

Income tax expense of $5.1 million represented a 26.7% effective tax rate for the first quarter of 2024, compared with $3.0 million in the first quarter of 2023, representing an effective tax rate of 19.7%. The increase in 2024 is due to the expiration of the tax incentive in China, the impact of the global intangible low-taxed income tax (GILTI) impact in the United States, and the implementation of the Global Minimum Tax (GMT) in some of our foreign jurisdictions beginning in 2024.

Current wording

Income tax expense of $5.0 million represented a 24.3% effective tax rate for the second quarter of 2024, compared with $3.9 million in the second quarter of 2023, representing an effective tax rate of 21.9%. The increase in 2024 is due to the expiration of tax incentives in China, the impact of the global intangible low-taxed income (GILTI) tax in the United States, and the implementation of the Global Minimum Tax (GMT) in some of our foreign jurisdictions beginning in 2024.

Previous wording

The Company has been granted certain tax incentives, including tax holidays, for its subsidiaries in Thailand, China and Malaysia that expire at various dates, unless extended or otherwise renegotiated, and are subject to certain conditions with which the Company expects to comply. The tax incentives in Thailand will expire on December 31, 2030. The tax incentives in China expired on December 31, 2023 and the tax incentives in Malaysia expired on March 31, 2021. The Company is applying for a continuation of the Malaysia tax holiday, which will extend the tax incentive period for five to ten years if approved. The Company will also apply for a China tax holiday in 2024. There is no guarantee of being awarded these tax incentives in the future. See Note 8 to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Report.

Current wording

The Company has been granted certain tax incentives, including tax holidays, for its subsidiaries in Thailand, China and Malaysia that expire at various dates, unless extended or otherwise renegotiated, and are subject to certain conditions with which the Company expects to comply. The tax incentives in Thailand will expire on December 31, 2030. The tax incentives in China expired on December 31, 2023 and the tax incentives in Malaysia expired on March 31, 2021. The Company is applying for a continuation of the Malaysia tax incentives, which will extend the tax incentive period for five to ten years if approved. The Company will also apply for a three year China tax reduction in 2024 that will provide tax incentives for 2024 to 2026. There is no guarantee of being awarded these tax incentives in the future. See Note 8 to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Report.

Previous wording

We reported net income of $14.0 million, or $0.38 per diluted share, for the first quarter of 2024, compared with net income of $12.4 million, or $0.35 per diluted share, for the first quarter of 2023. The increase was primarily due to the items discussed above.

Current wording

We reported net income of $15.5 million, or $0.43 per diluted share, for the second quarter of 2024, compared with net income of $14.0 million, or $0.39 per diluted share, for the second quarter of 2023. We reported net income of $29.5 million, or $0.81 per diluted share, for the first six months of 2024, compared with net income of $26.4 million, or $0.74 per diluted share, for the first six months of 2023. The increases were primarily due to the items discussed above.

Previous wording

We have historically financed our organic growth and operations through funds generated from operations and occasional borrowings under our Credit Agreement (as defined below). Cash, cash equivalents and restricted cash totaled $296.1 million as of March 31, 2024, which included $271.4 million held outside the United States in various foreign subsidiaries.

Current wording

We have historically financed our organic growth and operations through funds generated from operations and occasional borrowings under our Credit Agreement (as defined below). Cash, cash equivalents and restricted cash totaled $309.9 million as of June 30, 2024, which included $291.0 million held outside the United States in various foreign subsidiaries.

Previous wording

Cash provided from operating activities was $48.5 million in first quarter of 2024 and primarily consisted of $14.0 million of net income, adjusted for $11.6 million of depreciation and amortization, $2.2 million of stock-based compensation expense, a $31.0 million decrease in accounts receivable and a $45.2 million decrease in inventories, partially offset by a $20.3 million decrease in accounts payable and a $15.7 million decrease in advance payments from customers. Working capital was $0.9 billion as of March 31, 2024.

Current wording

Cash provided from operating activities was $104.3 million during the first six months of 2024 and primarily consisted of $29.5 million of net income, adjusted for $23.0 million of depreciation and amortization, $6.4 million of stock-based compensation expense, a $71.3 million decrease in accounts receivable and a $82.7 million decrease in inventories, partially offset by a $47.7 million decrease in advance payments from customers, a $22.6 million decrease in accrued liabilities and a $25.6 million decrease in accounts payable. Working capital was $0.9 billion as of June 30, 2024.

Previous wording

Cash used in investing activities was $6.2 million in first quarter of 2024 primarily due to capital expenditures for property, plant and equipment of $5.2 million and purchased software of $0.7 million. The purchases of property, plant and equipment were primarily for leasehold improvements and machinery and equipment in the Americas and Asia.

Current wording

Cash used in investing activities was $15.8 million during the first six months of 2024 primarily due to capital expenditures for property, plant and equipment of $12.8 million and purchased software of $1.6 million. The purchases of property, plant and equipment were primarily for leasehold improvements and machinery and equipment in the Americas and Asia.

Previous wording

Cash used in financing activities was $27.1 million in first quarter of 2024. Borrowings under the Credit Agreement were $175.0 million and principal payments under the Credit Agreement were $190.8 million. In addition, we paid $5.9 million of dividends and $5.8 million for employee taxes paid to settle stock-based awards exercised during the first quarter of 2024.

Current wording

Cash used in financing activities was $58.9 million during the first six months of 2024. Borrowings under the Credit Agreement were $320.0 million and principal payments under the Credit Agreement were $361.6 million. In addition, we paid $11.8 million of dividends and $5.8 million for employee taxes paid to settle stock-based awards exercised during the first six months of 2024.

Previous wording

As of March 31, 2024, we had $126.3 million in borrowings outstanding under the term loan facility and $190.0 million outstanding under our revolving credit facility and $4.4 million in letters of credit outstanding under our revolving credit facility. See Note 5 to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Report for more information regarding the terms of our Credit Agreement.

Current wording

As of June 30, 2024, we had $125.5 million in borrowings outstanding under the term loan facility and $165.0 million outstanding under our revolving credit facility and $4.4 million in letters of credit outstanding under our revolving credit facility. See Note 5 to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Report for more information regarding the terms of our Credit Agreement.

Previous wording

As of March 31, 2024, we had $355.6 million available for borrowings under the Credit Agreement. During the next 12 months, we believe our capital expenditures will approximate $60 million to $70 million, principally for machinery and equipment to help increase our production capacity to support anticipated revenue growth and our ongoing business around the globe.

Current wording

As of June 30, 2024, we had $380.6 million available for borrowings under the Credit Agreement. During the next 12 months, we believe our capital expenditures will approximate $60 million to $70 million, principally for machinery and equipment to help increase our production capacity to support anticipated revenue growth and our ongoing business around the globe.

Previous wording

During the three months ended March 31, 2024 and 2023, cash dividends paid totaled $5.9 million and $5.8 million, respectively. On March 11, 2024, the Company declared a quarterly cash dividend of $0.165 per share of the Company’s common stock to shareholders of record as of March 29, 2024. The dividend of $5.9 million was paid on April 12, 2024.

Current wording

During the six months ended June 30, 2024 and 2023, cash dividends paid totaled $11.8 million and $11.7 million, respectively. On June 10, 2024, the Company declared a quarterly cash dividend of $0.165 per share of the Company’s common stock to shareholders of record as of June 28, 2024. The dividend of $5.9 million was paid on July 12, 2024.

Previous wording

Share purchases may be made in the open market, in privately negotiated transactions or block transactions, at the discretion of the Company’s management and as market conditions warrant. Purchases will be funded from available cash and may be commenced, suspended or discontinued at any time without prior notice. Shares repurchased under the program are retired. The Company did not repurchase shares in 2023. As of March 31, 2024, the Company had $154.6 million remaining under share repurchase authorizations.

Current wording

Share purchases may be made in the open market, in privately negotiated transactions or block transactions, at the discretion of the Company’s management and as market conditions warrant. Purchases will be funded from available cash and may be commenced, suspended or discontinued at any time without prior notice. Shares repurchased under the program are retired. The Company did not repurchase shares during the six months ended June 30, 2024. As of June 30, 2024, the Company had $154.6 million remaining under share repurchase authorizations.