BENCHMARK ELECTRONICS INC
For the period ended Dec 31, 2025. Filed Feb 24, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 24, 2026
BHE$60.40+1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-24.
0000950170-25-025644
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-24.
0001193125-26-064849
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 104 previous paragraphs and 100 current paragraphs.
46 unchanged; 32 reworded; 21 added; 25 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
Semi-Cap increased by 2%
Current report
Industrial remained flat
Current report
Medical increased by 7%
Current report
A&D increased by 19%
Current report
AC&C decreased by 27%
Current report
RESULTS OF OPERATIONS
Current report
Semiconductor Capital Equipment. 2025 sales increased 2% to $741.2 million from $723.2 million in 2024. The increase was primarily due to higher demand with existing customers.
Current report
Industrial. 2025 sales increased slightly to $574.7 million from $573.3 in 2024. The slight increase was due to mixed demand.
Current report
Medical. 2025 sales increased 7% to $483.9 million from $450.7 million in 2024. The increase was primarily due to higher demand with existing customers.
Current report
Advanced Computing and Communications. 2025 sales decreased 27% to $344.9 million from $474.9 million in 2024. The decrease was due to lower demand from existing customers.
Current report
Americas.2025 operating income decreased 38% to $24.8 million from $40.2 million in 2024. The decrease was primarily due to increased restructuring charges and other costs due to settlement of an indirect tax assessment as well as an impairment charge, partially offset by cost control. See Note 15 and Note 16 to the consolidated financial statements in Part II, Item 8 of this Report for additional information on the tax assessment and impairment charge, respectively. Restructuring expenses are discussed under “Restructuring Charges and Other Costs” below.
Current report
During 2025, we recognized $7.4 million of restructuring charges and other costs which primarily related to closures of our site in Fremont, California and our old facility in Guadalajara, Mexico in the Americas, the exit of a business in the Americas, and other smaller activities involving capacity reductions and reductions in workforce in certain facilities across various regions. Fremont, California operations ceased during the third quarter of 2025 and all restructuring activity was fully complete as of December 31, 2025 upon the disposition of the facility. Operations at our new facility in Guadalajara, Mexico commenced in 2024 with customer programs continuing to transition into 2025. Operations at our old facility in Guadalajara, Mexico operations ceased during the third quarter of 2025 and all restructuring activity is expected to be fully complete in 2026.
Current report
Additionally, the Company agreed to an $11.0 million settlement related to an indirect tax assessment in the Americas for the year ended December 31, 2025. See Note 15 to the consolidated financial statements in Part II, Item 8 of this Report.
Current report
During the year ended December 31, 2025, the Company identified an impairment triggering event related to the performance of a manufacturing site in the Americas. In connection with that analysis, the Company assessed the facility and equipment assets used in that manufacturing site using valuation information from third parties and recorded $11.1 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 December 31, 2025.
Current report
Interest income decreased to $9.6 million in 2025 from $10.2 million in 2024 primarily due to a lower interest rate environment and lower cash balances in interest-bearing accounts.
Current report
Other Expense, Net
Current report
On June 27, 2025, the Company entered into a $700 million second amended and restated credit agreement (the Credit Agreement) by and among the Company, certain of its subsidiaries, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swingline Lender and an L/C Issuer. The Credit Agreement is comprised of a five-year $550 million revolving credit facility and a five-year $150 million term loan facility, both with a maturity date of June 27, 2030.
Current report
We account for income taxes using the asset‑and‑liability method, recognizing deferred tax assets and liabilities for the future tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the periods in which the related temporary differences reverse. Our income tax provision reflects management’s judgment regarding tax positions, taxable income forecasts, and the realizability of deferred tax assets.
Current report
We assess the realizability of deferred tax assets each reporting period and record a valuation allowance when it is more likely than not that some portion will not be realized. In evaluating the need for a valuation allowance, we consider both positive and negative evidence, with greater weight given to objectively verifiable indicators such as recent earnings trends in the relevant jurisdictions, the expected timing and amount of future reversals of temporary differences, forecasts of future taxable income, and feasible tax‑planning strategies. As of December 31, 2025, our valuation allowance was approximately $26.9 million, primarily related to deferred tax assets from certain foreign operations. Changes in actual or expected operating performance—whether due to improved profitability, changes in business activity, acquisitions, or adverse economic conditions—may result in adjustments to the valuation allowance and corresponding effects on income tax expense.
Current report
Several jurisdictions in which we operate have enacted OECD/G20 Pillar Two Global Minimum Tax legislation effective January 1, 2024. The resulting impacts on our income tax provision, net income, and cash flows are reflected in our consolidated financial statements for the year ended December 31, 2025.
Current report
We also evaluate exposures related to uncertain tax positions and record reserves when required. We believe our tax positions are appropriately supported and that our reserves for uncertain tax positions are adequate. We are subject to examination by tax authorities in the United States and foreign jurisdictions, and such examinations may involve complex issues requiring judgment.
Removed paragraphs (25)
Previous report
Semi-Cap increased by 12%
Previous report
Industrial decreased by 4%
Previous report
Medical decreased by 19%
Previous report
A&D increased by 20%
Previous report
AC&C decreased by 30%
Previous report
We have undertaken initiatives to restructure our business operations with the intention of improving utilization and reducing costs. During 2024, we recognized $6.3 million of restructuring charges primarily related to capacity and workforce reductions at our sites in the Americas.
Previous report
During 2023, we recognized $7.3 million of restructuring charges primarily due to expenses associated with announced site closures or exits, reductions in work force and other restructuring activities primarily in the Americas. During 2023, we made the decision to no longer offer certain manufacturing capabilities in the Americas. In connection with that decision, we assessed the facility and equipment assets used in those manufacturing capabilities and recorded $1.1 million of impairment charges as a result of that assessment. The asset impairment charges are included in restructuring charges and other costs in the consolidated statement of income.
Previous report
Semi-Conductor Capital Equipment. 2024 sales increased 12% to $723.2 million from $646.3 million in 2023 primarily due to increased demand from existing customers and new customer wins.
Previous report
Industrial. 2024 sales decreased 4% to $573.3 million from $596.5 in 2023 as a result of lower demand with existing customers, partially offset by new program ramps.
Previous report
Medical. 2024 sales decreased 19% to $450.7 million from $556.6 million in 2023 primarily due to inventory rebalancing and end-demand weakness within medical devices.
Previous report
Advanced Computing and Communications. 2024 sales decreased 30% to $474.9 million from $678.1 million in 2023 primarily due to large high performance computing programs being completed coupled with continued weakness in communications and the disengagement with a large customer.
Previous report
Americas.2024 operating income decreased 37% to $40.2 million from $63.5 million in 2023. The decrease was primarily due to lower revenue.
Previous report
During 2023, we recognized $7.3 million of restructuring charges primarily due to expenses associated with announced site closures or exits, reductions in work force and other restructuring activities primarily in the Americas. During 2023, we made the decision to no longer continue certain manufacturing capabilities in the Americas. In connection with that decision, we assessed the facility and equipment assets used in those manufacturing capabilities and recorded $1.1 million of impairment charges as a result of that assessment. The asset impairment charges are included in restructuring charges and other costs in the consolidated statement of income.
Previous report
Interest income increased to $10.2 million in 2024 from $6.3 million in 2023 primarily due to higher interest rates.
Previous report
Other (Expense) Income, Net
Previous report
On December 21, 2021, the Company amended and restated the Company’s prior $650 million credit agreement by entering into a $381 million amended and restated credit agreement (the Amended and Restated Credit Agreement). Under the terms of the Amended and Restated Credit Agreement, in addition to the $131.3 million term loan facility, we have a $250.0 million five-year revolving credit facility to be used for general corporate purposes, both with a maturity date of December 21, 2026.
Previous report
On May 20, 2022, the Company entered into Amendment No. 1 (the Amendment) to the Amended and Restated Credit Agreement (as amended, the Credit Agreement). The Amendment increased the revolving credit facility commitments from $250 million to $450 million. The Amendment also established that the interest on outstanding borrowings starting on the next reset date and any new borrowings under the Amendment (other than swingline loans) will accrue, at the Company’s option, at (a) Bloomberg Short Term Bank Yield Index (BSBY) plus the Applicable Rate (as defined in the Credit Agreement, approximately 1.00% to 2.00% per annum depending on various factors) or (b) for U.S. dollar denominated loans, the base rate (which is the highest of (i) the federal funds rate plus 0.50%, (ii) the Bank of America, N.A. prime rate, (iii) the one-month BSBY adjusted daily rate plus 1.00% and (iv) 1.00%).
Previous report
On February 3, 2023, the Company entered into Amendment No. 2 to the Credit Agreement, which increased the maximum amount of trade accounts that the Company may elect to sell at any one time to $200.0 million.
Previous report
On May 1, 2023, the Company entered into Amendment No. 3 to the Credit Agreement (Amendment No. 3), which increased the revolving credit facility commitments from $450 million to $550 million. Amendment No. 3 also established that the interest on outstanding borrowings starting on the next reset date and any new borrowings under Amendment No. 3 (other than swingline loans) will accrue, at the Company’s option, at (a) Term Secured Overnight Financing Rate (SOFR) plus 0.10% plus the Applicable Rate (as defined in the Credit Agreement, approximately 1.00% to 2.00% per annum depending on various factors) or (b) for U.S. dollar denominated loans, the base rate (which is the highest of (i) the federal funds rate plus 0.50%, (ii) the Bank of America, N.A. prime rate, (iii) Term SOFR plus 1.00% and (iv) 1.00%).
Previous report
We estimate our income tax provision in each of the jurisdictions where we operate, including estimating exposures related to uncertain tax positions. We must also make judgments regarding our ability to realize the future tax benefit from our deferred tax assets. We record a valuation allowance to reduce our deferred tax assets to the amount that we believe is more likely than not to be realized. As of December 31, 2024, our valuation allowance was $26.7 million and primarily relates to the deferred tax assets of our foreign locations.
Previous report
Differences in our future operating results as compared to the estimates utilized in the determination of the valuation allowance against our deferred tax assets could result in adjustments to the respective valuation allowances in future periods. For example, a significant increase in the operations of our foreign locations or future accretive acquisitions of our foreign locations would result in a reduction in our valuation allowance in the period of occurrence and would increase our income in the period such determination was made. Alternatively, significant economic downturns in our U.S. or foreign locations generating additional operating loss carryforwards could possibly result in an increase in our valuation allowance and would decrease our income in the period such determination was made.
Previous report
The OECD and the G20 Inclusive Framework on Base Erosion and Profit Shifting have published the Pillar Two model rules designed to address the tax challenges arising from the digitalization of the global economy. The Pillar Two model rules adopt a global minimum tax (GMT) of 15% for multinational enterprises with average revenue in excess of €750 million on their global consolidated financial statements. The Council of the European Union has adopted the Pillar Two model rules and has directed EU member states to implement legislation enacting the Pillar Two model rules. Many countries, including non-EU member states, have implemented GMT legislation based on the Pillar Two model rules that were effective as of January 1, 2024.
Previous report
The Company has manufacturing operations in several of the foreign jurisdictions that have implemented the GMT legislation. The impact of the GMT legislation to the Company’s provision for income taxes, net income and cash flows is included in our annual financial statements as of December 31, 2024.
Previous report
We are subject to examination by tax authorities for different periods in various U.S. and foreign tax jurisdictions. During the course of such examinations, disputes may occur as to matters of fact and/or law. In most tax jurisdictions, the passage of time without examination will result in the expiration of applicable statutes of limitations, thereby precluding the taxing authority from examining the relevant tax period(s). We believe that we have adequately provided for our tax liabilities.
Previous report
U.S. federal income tax on deemed mandatory repatriation is payable over four years pursuant to the U.S. Tax Reform. See Note 8 to the consolidated financial statements in Part II, Item 8 of this Report.
Reworded paragraphs (32)
Previous wording
For discussion and analysis regarding our financial condition and results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022, refer to Part II, Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 27, 2024.
Current wording
For discussion and analysis regarding our financial condition and results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023, refer to Part II, Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on February 24, 2025, as amended on February 27, 2025. For a discussion of the correction of an immaterial error see Note 1 to the consolidated financial statements in Part II, Item 8 of this report.
Previous wording
Sales for 2024 were $2.7 billion, a 6% decrease from sales of $2.8 billion in 2023. During 2024, sales to customers in our various industry sectors fluctuated from 2023 as follows:
Current wording
Sales for 2025 and 2024 were both $2.7 billion. During 2025, sales to customers in our various industry sectors fluctuated from 2024 as follows:
Previous wording
Revenue decreased year-over-year primarily due to decreases in medical and AC&C sales, which were partially offset by increases in semi-cap and A&D sales.
Current wording
Revenue was flat year-over-year primarily due to increases in A&D, Medical, and Semi-Cap, which were offset by a decrease in AC&C sales.
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 50% and 52% of our total sales in 2024 and in 2023, respectively. Sales to Applied Materials, Inc. and subsidiaries, our largest customer in 2024 and 2023 represented 14% and 12% of our total sales in 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 51% and 50% of our total sales in 2025 and in 2024, respectively. Sales to Applied Materials, Inc. and subsidiaries, our largest customer in 2025 and 2024 represented 14% of our total sales in both 2025 and 2024. 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
Sales decreased 6% in 2024. The percentages of our sales by market sector were as follows:
Current wording
Sales remained flat in 2025. The percentages of our sales by market sector were as follows:
Previous wording
Aerospace and Defense. 2024 sales increased 20% to $434.0 million from $361.5 million in 2023 primarily due to demand growth in Space, continued demand in Commercial Aerospace and broad-based strength from existing programs as well as new program wins in Defense.
Current wording
Aerospace and Defense. 2025 sales increased 19% to $514.4 million from $434.0 million in 2024. The increase was primarily due to strong market growth in both commercial aerospace and defense.
Previous wording
Our international operations are subject to the risks of doing business abroad. See Part I, Item 1A of this Report for risk factors pertaining to 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 2024 and 2023, 62% and 58%, 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 this Report for risk factors pertaining to 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 2025 and 2024, 64% and 62%, respectively, of our sales were from international operations.
Previous wording
Americas. 2024 sales decreased 17% to $1.3 billion from $1.6 billion in 2023 primarily due to decreases in sales in our semi-cap, medical, A&D and AC&C sectors.
Current wording
Americas. 2025 sales decreased 8% to $1.2 billion from $1.3 billion in 2024 primarily due to decreases in sales in our Semi-Cap, Industrial, and AC&C sectors.
Previous wording
Asia.2024 sales increased 3% to $1.1 billion from $1.1 billion in 2023 primarily due to increases in existing customer demand of our semi-cap and industrial sectors.
Current wording
Asia.2025 sales increased 7% to $1.2 billion from $1.1 billion in 2024 primarily due to increases in existing customer demand of our A&D, Semi-Cap, and Industrial sectors.
Previous wording
Europe. 2024 sales increased 13% to $339.3 million from $299.8 million in 2023 primarily due to increases in sales in our semi-cap and A&D sectors.
Current wording
Europe. 2025 sales increased 4% to $352.5 million from $339.3 million in 2024 primarily due to increases in sales in our A&D, Medical, and Industrial sectors.
Previous wording
Gross profit of $270.0 million in 2024 compared to $271.1 million in 2023 was relatively consistent. Gross profit margin increased to 10.2% in 2024 from 9.5% in 2023 primarily due to improved operational efficiencies and the proactive cost reduction actions taken by our manufacturing sites.
Current wording
Gross profit of $270.1 million in 2025 compared to $270.0 million in 2024 was relatively consistent. Gross profit margin was 10.2% in both 2025 and 2024.
Previous wording
2024 income from operations declined slightly to $109.4 million from $109.7 million in 2023.
Current wording
2025 income from operations declined to $76.0 million from $109.4 million in 2024.
Previous wording
Asia. 2024 operating income increased 13% to $140.3 million from $124.3 million in 2023. The increase was primarily due to higher revenue and expense control.
Current wording
Asia. 2025 operating income increased slightly to $140.8 million from $140.3 million in 2024. The increase was primarily due to higher revenue.
Previous wording
Europe. 2024 operating income increased 51% to $26.3 million from $17.4 million in 2023. The increase was primarily due to higher revenue and expense control.
Current wording
Europe. 2025 operating income increased 36% to $35.8 million from $26.3 million in 2024. The increase was primarily due to higher revenue and expense control.
Previous wording
SG&A expense increased to $149.5 million in 2024 from $147.0 million in 2023. The increase was primarily due to higher legal and salary costs.
Current wording
SG&A expense increased to $159.7 million in 2025 from $149.5 million in 2024. The increase was primarily due to variable compensation.
Previous wording
Amortization of intangible assets was $4.8 million in 2024 and $6.0 million in 2023. The decrease was primarily due to certain assets becoming fully amortized in 2023.
Current wording
Amortization of intangible assets was $4.8 million in both 2025 and 2024.
Previous wording
Interest expense decreased to $26.9 million in 2024 from $31.9 million in 2023 primarily due to decreased borrowings partially offset by a higher interest rate environment.
Current wording
Interest expense decreased to $20.2 million in 2025 from $26.9 million in 2024 primarily due to decreased borrowings and a lower interest rate environment.
Previous wording
Other (expense) income, net, was an expense of $8.8 million in 2024 compared to an expense of $2.8 million in 2023, both primarily consisting of foreign exchange losses.
Current wording
Other expense, net, was $3.9 million in 2025 primarily consisting of losses on accounts receivable sales and foreign exchange losses compared to other expense, net, of $8.8 million in 2024 primarily consisting of foreign exchange losses.
Previous wording
Income tax expense in 2024 was $20.6 million representing an effective tax rate of 24.5% compared with $16.9 million of income tax expense in 2023 representing an effective tax rate of 20.8%. The higher effective tax rate in 2024 is the result of the mix of profits and losses in our foreign and U.S. jurisdictions with higher overall tax expense in our foreign locations.
Current wording
Income tax expense in 2025 was $36.7 million representing an effective tax rate of 59.6% compared with $22.8 million of income tax expense in 2024 representing an effective tax rate of 27.1%. The increase in the effective tax rate in 2025 is primarily due to the $10.4 million in discrete tax expense recorded in the second quarter for the foreign withholding taxes on repatriated distributions and recognition of deferred tax liabilities on China unremitted earnings, losses generated in jurisdictions where no tax benefit can be recognized and to the mix of profits in our various jurisdictions.
Previous wording
We reported net income of $63.3 million, or $1.72 per diluted share, for 2024, compared with net income of $64.3 million, or $1.79 per diluted share, for 2023. The decrease of $1.0 million in 2024 is primarily the result of items discussed above.
Current wording
We reported net income of $24.9 million, or $0.68 per diluted share, for 2025, compared with net income of $61.1 million, or $1.66 per diluted share, for 2024. The decrease of $36.2 million in 2025 is primarily the result of items discussed above.
Previous wording
We have historically financed our organic growth and operations through funds generated from operations borrowings under our Credit Agreement (as defined below). Cash and cash equivalents and restricted cash totaled $328.0 million at December 31, 2024 and $283.2 million at December 31, 2023, of which $304.9 million and $269.6 million, respectively, was 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 borrowings under our Credit Agreement (as defined below). Cash and cash equivalents and restricted cash totaled $322.4 million at December 31, 2025 and $328.0 million at December 31, 2024, of which $288.9 million and $304.9 million, respectively, was held outside the United States in various foreign subsidiaries.
Previous wording
Our operations, and the operations of businesses we acquire, are subject to certain foreign, federal, state and local regulatory requirements relating to environmental, waste management, health and safety matters. We believe we operate in substantial compliance with all applicable requirements, and we seek to ensure that newly acquired businesses comply or will comply substantially with applicable requirements. To date, the costs of compliance and workplace and environmental remediation have not been material to us. However, material costs and liabilities may arise from these requirements or from new, modified or more stringent requirements in the future. In addition, our past, current and future operations, and the operations of businesses we have or may acquire, may give rise to claims of exposure by employees or the public, or to other claims or liabilities relating to environmental, waste management or health and safety concerns.
Current wording
Our operations are subject to certain foreign, federal, state and local regulatory requirements relating to environmental, waste management, health and safety matters. We believe we operate in substantial compliance with all applicable requirements, and we seek to ensure that newly acquired businesses comply or will comply substantially with applicable requirements. To date, the costs of compliance and workplace and environmental remediation have not been material to us. However, material costs and liabilities may arise from these requirements or from new, modified or more stringent requirements in the future. In addition, our past, current and future operations, and the operations of businesses we have or may acquire, may give rise to claims of exposure by employees or the public, or to other claims or liabilities relating to environmental, waste management or health and safety concerns.
Previous wording
Cash provided from operating activities was $189.2 million in 2024 and primarily consisted of $63.3 million of net income, adjusted for $46.1 million of depreciation and amortization, $13.4 million of stock-based compensation expense, a $34.0 million decrease in accounts receivable, and a $127.8 million decrease in inventories partially offset by a $61.3 million decrease in advance payments from customers and a $18.3 million decrease in accounts payable. Working capital was $0.9 billion as of December 31, 2024.
Current wording
Cash provided from operating activities was $124.0 million in 2025 and primarily consisted of $24.9 million of net income, adjusted for $47.6 million of depreciation and amortization, $17.2 million of stock-based compensation expense, $11.1 million of asset impairment, a $25.7 million decrease in accounts receivable, and a $75.2 million decrease in inventories partially offset by a $28.1 million decrease in advance payments from customers and a $32.4 million decrease in accounts payable. Working capital was $0.8 billion as of December 31, 2025.
Previous wording
We primarily purchase components only after customer orders or forecasts are received, which mitigates, but does not eliminate, the risk of loss on inventories. Supplies of electronic components and other materials used in operations are subject to industry-wide shortages. In certain instances, suppliers may allocate available quantities to us. When shortages of these components and other material supplies used in operations have occurred, vendors have at times been unable to ship the quantities we need for production, forcing us to delay shipments, which can increase backorders and impact cash flows. Vendors also may increase the costs of components based on the market conditions including these shortages. In certain instances, we request and receive advance payments from customers as prepayments of inventory to meet working capital demands of a contract, offset inventory risks such as inventory purchased in advance of current needs and protect the Company from the failure of other parties to fulfill obligations under a contract. For example, we have historically been impacted by supply chain constraints, including shortages, longer lead times and increased transit times.
Current wording
We primarily purchase components only after customer orders or forecasts are received, which mitigates, but does not eliminate, the risk of loss on inventories. Supplies of electronic components and other materials used in operations are subject to industry-wide shortages. In certain instances, suppliers may allocate available quantities to us. When shortages of these components and other material supplies used in operations have occurred, vendors have at times been unable to ship the quantities we need for production, forcing us to delay shipments, which can increase backorders and impact cash flows. Vendors also may increase the costs of components based on the market conditions including these shortages. In certain instances, we request and receive advance payments from customers as prepayments of inventory to meet working capital demands of a contract, offset inventory risks such as inventory purchased in advance of current needs and protect the Company from the failure of other parties to fulfill obligations under a contract. For example, we have historically been impacted by supply chain constraints, including shortages, longer lead times and increased transit times. Furthermore, the U.S. government’s adoption of new approaches to trade policy and imposition of tariffs on certain foreign goods (as well as the possibility of imposing significant, additional tariffs in the future) may make it more difficult or costly for us to procure components and other material supplies and, in turn, may increase the cost to our customers, which may materially and adversely impact demand for our products and services, our results of operations or our financial condition.
Previous wording
Cash used in investing activities was $32.8 million in 2024 primarily due to capital expenditures for property, plant and equipment of $31.3 million and purchased software of $1.9 million partially offset by $2.0 million in proceeds from the disposal of property, plant and equipment. The purchases of property, plant and equipment were primarily for machinery and equipment in the Americas and Asia.
Current wording
Cash used in investing activities was $32.7 million in 2025 primarily due to capital expenditures for property, plant and equipment of $35.6 million, purchased software of $2.9 million partially offset by $5.1 million of proceeds from business divestiture and $0.8 million in proceeds from the disposal of property, plant and equipment. 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 $109.1 million in 2024. Borrowings under the Credit Agreement were $600.0 million and principal payments under the Credit Agreement were $674.1 million. In addition, we paid $23.9 million of dividends during 2024 and $6.3 million for employee taxes paid to settle stock-based awards exercised during the year. We also completed $5.1 million in common stock share repurchases.
Current wording
Cash used in financing activities was $105.9 million in 2025. Borrowings under the Credit Agreement were $891.1 million and principal payments under the Credit Agreement were $936.0 million. In addition, we paid $24.4 million of dividends during 2025 and $7.3 million for employee taxes paid to settle stock-based awards exercised during the year. We also completed $26.8 million in common stock share repurchases.
Previous wording
As of December 31, 2024, we had $123.0 million in borrowings outstanding under the term loan facility and $135.0 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 consolidated financial statements in Part II, Item 8 of this Report for more information regarding the terms of our Credit Agreement.
Current wording
As of December 31, 2025, we had $148.1 million in borrowings outstanding under the term loan facility and $65.0 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 consolidated financial statements in Part II, Item 8 of this Report for more information regarding the terms of our Credit Agreement.
Previous wording
The Credit Agreement contains certain financial covenants related to interest coverage and debt leverage, and certain customary affirmative and negative covenants, including restrictions on our ability to incur additional debt and liens, pay dividends, repurchase shares, sell assets and merge or consolidate with other persons. Amounts due under the Credit Agreement could be accelerated upon specified events of default, including a failure to pay amounts due, breach of a covenant, material inaccuracy of a representation, or occurrence of bankruptcy or insolvency, subject, in some cases, to cure periods. As of December 31, 2024, we were in compliance with all of these covenants and restrictions.
Current wording
The Credit Agreement contains certain financial covenants related to interest coverage and debt leverage, and certain customary affirmative and negative covenants, including restrictions on our ability to incur additional debt and liens, pay dividends, repurchase shares, sell assets, including trade accounts receivable, and merge or consolidate with other persons. Amounts due under the Credit Agreement could be accelerated upon specified events of default, including a failure to pay amounts due, breach of a covenant, material inaccuracy of a representation, or occurrence of bankruptcy or insolvency, subject, in some cases, to cure periods. As of December 31, 2025, we were in compliance with all of these covenants and restrictions.
Previous wording
As of December 31, 2024, we had $410.6 million available for borrowings under the Credit Agreement. During the next 12 months, we believe our capital expenditures will be approximately $65 million to $75 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 December 31, 2025, we had $480.6 million available for borrowings under the Credit Agreement, subject to compliance with financial covenants as to interest coverage and debt leverage, in addition to other debt covenant restrictions. During the next 12 months, we believe our capital expenditures will be approximately $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
On March 6, 2018, the Board of Directors approved an expanded share repurchase authorization granting the Company authority to repurchase up to $250 million in common stock in addition to the $100 million previously approved on December 7, 2015. On October 26, 2018, the Board of Directors authorized the Company to repurchase up to $100 million in common stock. Subsequently, on October 26, 2018, the Board of Directors approved an additional share repurchase authorization, allowing the Company to repurchase up to $100 million in common stock. Subsequently, on February 19, 2020, the Board approved an additional share repurchase authorization, allowing the Company to buy back another $150 million in common stock.
Current wording
On February 19, 2020, the Board approved an expanded share repurchase authorization, allowing the Company to repurchase up to $150 million in common stock.
Previous wording
During 2024, the Company repurchased 0.1 million shares for an aggregate of $5.1 million, at an average price of $40.27 per share. As of December 31, 2024, the Company had $149.5 million remaining under share its repurchase authorization.
Current wording
During 2025, the Company repurchased 0.7 million shares for an aggregate of $26.8 million, at an average price of $38.22 per share. As of December 31, 2025, the Company had $122.7 million remaining under share its repurchase authorization.
Previous wording
During 2024, 2023 and 2022, cash dividends paid totaled $23.9 million, $23.5 million and $23.2 million, respectively. On December 9, 2024, the Company announced that the Board of Directors declared a quarterly cash dividend of $0.17 per share of the Company’s common stock to shareholders of record as of December 31, 2024. The dividend of $6.1 million was paid on January 14, 2025.
Current wording
During 2025, 2024 and 2023, cash dividends paid totaled $24.4 million, $23.9 million and $23.5 million, respectively. On December 15, 2025, the Company announced that the Board of Directors declared a quarterly cash dividend of $0.17 per share of the Company’s common stock to shareholders of record as of December 31, 2025. The dividend of $6.1 million was paid on January 13, 2026.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
See Note 16 to the consolidated financial statements in Part II, Item 8 of this Report for additional information on our restructuring charges.