# BENCHMARK ELECTRONICS INC (BHE) Informational only - not investment advice. CIK: 0000863436 SIC: 3672 Printed Circuit Boards SIC breadcrumb: [Manufacturing](/division/D/) > [Electronic And Other Electrical Equipment And Components, Except Computer Equipment](/major-group/36/) > [SIC 3672 Printed Circuit Boards](/industry/3672/) Latest 10-K filed: 2026-02-24 SEC page: https://www.sec.gov/edgar/browse/?CIK=863436 Filing source: https://www.sec.gov/Archives/edgar/data/863436/000119312526064849/bhe-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 2659108000 | USD | 2025 | 2026-02-24 | | Net income | 24852000 | USD | 2025 | 2026-02-24 | | Assets | 2071715000 | USD | 2025 | 2026-02-24 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000863436.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 2,322,285,000 | 2,454,479,000 | 2,566,465,000 | 2,268,095,000 | 2,053,131,000 | 2,255,319,000 | 2,886,331,000 | 2,838,976,000 | 2,656,105,000 | 2,659,108,000 | | Net income | 63,933,000 | -31,901,000 | 22,817,000 | 23,425,000 | 14,055,000 | 35,770,000 | 68,229,000 | 68,943,000 | 61,126,000 | 24,852,000 | | Operating income | 76,860,000 | 76,826,000 | 58,538,000 | 28,545,000 | 25,134,000 | 53,062,000 | 90,069,000 | 109,664,000 | 109,411,000 | 76,049,000 | | Gross profit | 214,685,000 | 225,920,000 | 205,836,000 | 185,528,000 | 175,048,000 | 205,901,000 | 255,235,000 | 271,070,000 | 270,024,000 | 270,064,000 | | Diluted EPS | 1.28 | -0.64 | 0.49 | 0.60 | 0.38 | 0.99 | 1.91 | 1.92 | 1.66 | 0.68 | | Assets | 2,008,925,000 | 2,109,304,000 | 1,899,783,000 | 1,759,874,000 | 1,744,235,000 | 1,903,880,000 | 2,227,331,000 | 2,274,755,000 | 2,134,444,000 | 2,071,715,000 | | Liabilities | | 770,166,000 | | | | | | | 1,029,872,000 | 971,912,000 | | Stockholders' equity | 1,365,465,000 | 1,339,138,000 | 1,132,225,000 | 1,014,832,000 | 989,588,000 | 973,802,000 | 1,026,416,000 | 1,079,085,000 | 1,104,572,000 | 1,099,803,000 | | Cash and cash equivalents | 681,433,000 | 742,546,000 | 458,102,000 | 347,558,000 | 390,808,000 | 271,749,000 | 207,430,000 | 277,391,000 | 315,152,000 | 322,064,000 | | Net margin | 2.75% | -1.30% | 0.89% | 1.03% | 0.68% | 1.59% | 2.36% | 2.43% | 2.30% | 0.93% | | Operating margin | 3.31% | 3.13% | 2.28% | 1.26% | 1.22% | 2.35% | 3.12% | 3.86% | 4.12% | 2.86% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000863436.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2021-Q3 | 2021-09-30 | | | 0.23 | reported discrete quarter | | 2022-Q1 | 2022-03-31 | | | 0.31 | reported discrete quarter | | 2022-Q2 | 2022-06-30 | | | 0.49 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.53 | reported discrete quarter | | 2022-Q4 | 2022-12-31 | 750,644,000 | 21,219,000 | | derived Q4 = FY annual - nine-month YTD | | 2023-Q2 | 2023-06-30 | 733,232,000 | 13,991,000 | 0.39 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 719,695,000 | 20,412,000 | 0.57 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 691,354,000 | 17,552,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-06-30 | 665,896,000 | 15,528,000 | 0.43 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 657,747,000 | 15,374,000 | 0.42 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 656,887,000 | 18,423,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 631,764,000 | 3,644,000 | 0.10 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 642,335,000 | 972,000 | 0.03 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 680,678,000 | 14,263,000 | 0.39 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 704,331,000 | 5,973,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 677,280,000 | 13,023,000 | 0.36 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/863436/000119312526192574/bhe-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-04-30 Report date: 2026-03-31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 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 March 31, 2026 (this Report), the consolidated financial statements and Notes thereto appearing in the Company’s annual report on Form 10-K for the year ended December 31, 2025 (the 2025 10-K), and Part I, Item 1A, Risk Factors of the 2025 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. 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, expressed or implied, concerning the Company's outlook and guidance for quarterly periods or fiscal year 2026 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, amortization of intangibles, award of any tax incentives and capital expenditures, 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 2025 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, the potential of another U.S. government shutdown and the economic impacts, volatility and uncertainty resulting therefrom, geopolitical uncertainties including continuing hostilities and tensions, trade restrictions and sanctions, tariffs and retaliatory countermeasures, 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. OVERVIEW Benchmark Electronics, Inc. (the Company) is a Texas corporation that provides design engineering and advanced manufacturing services that include both electronic manufacturing services (EMS) and precision technology (PT) services. We support customers throughout their product lifecycle starting from initial product concept through volume production, including the ability to manage direct order fulfillment and provide aftermarket services. We are a trusted partner to our European and U.S. based national and multi-national original equipment manufacturers (OEMs). Served markets include: aerospace and defense (A&D), medical, industrial, semiconductor capital equipment (Semi-Cap), and advanced computing and communication (AC&C). The Company has manufacturing operations located in the United States and Mexico (the Americas), Asia and Europe. Our customer engagement focuses on two principal areas: • Manufacturing Services include printed circuit board assemblies (PCBAs), subsystem and full system integration, precision metal machining, complex electromechanical assembly, and related test and fulfillment services. We support build-to-order or configured-to-order programs across regulated, high-reliability markets. Our manufacturing capabilities span electronics assembly, precision machining, clean room assembly, systems integration, and direct order fulfillment. • Design & Engineering Services include turnkey product design, designing for manufacturability, design optimization for our factory processes and supply chain, test development, concurrent and sustaining engineering, and regulatory services. Our engineering services may be for systems, sub-systems, printed circuit boards and assemblies, and components. We have the flexibility and capability to engage anywhere in the design process flow. We provide these services across all the industries we serve. We often partner with our customers to provide turnkey product realization from requirements through the launch to volume production in our factories. We have also developed differentiated capabilities in radio frequency (RF) and optics. The need to improve size, weight and power (SWaP) to accommodate high frequency electronics communications is important to customers in the A&D, medical, and AC&C markets. 21 Our core strength lies in our ability to partner with our customers to provide concept-to-production solutions through a tightly integrated and seamless set of design, test, manufacturing, supply chain, and support services. The integration of these product realization services, along with our global manufacturing presence, increases our ability to respond to our customers’ needs by providing accelerated time-to-market and time-to-volume production of high-quality products, with an emphasis on complex products serving regulated markets with high reliability requirements. These capabilities and attributes enable us to build strong strategic relationships with our customers as an integral part of their business. Our ability to deliver these integrated solutions is enabled by our highly skilled personnel who provide leading-edge technical capabilities in engineering services (including full life cycle), high frequency RF systems, microelectronics, optics, miniaturization, and manufacturing services (including electronics, complex precision machining, and clean room assembly). To support customers across these sectors, we have strategically invested in geographically diverse manufacturing locations and global supply chain capabilities. A strong focus on human capital, including talent we hire and retain, is critical to maintaining our competitiveness. Our people-first culture is centered on our five core values, consisting of acting with integrity, valuing inclusion, commitment to customers, promoting ingenuity, and genuine caring for each other, our customers and our communities, and we take pride in our innovative and continuous improvement mindset. Our intent is to delight our customers while delivering operational and financial performance aligned with our goals. Through our employee engagement and customer satisfaction feedback processes, we continuously solicit and act upon information to improve our Company and better support our customers and business processes. We have invested in attracting and developing leadership throughout the organization and are committed to investing in an innovative and forward-thinking workforce. Our customers often face challenges in supply chain design, demand planning, material procurement, and inventory management due to demand variability, product design changes, short product life cycles, and component price fluctuations. We employ enterprise resource planning (ERP) systems and lean/six sigma methodologies to efficiently and cost-effectively manage procurement and manufacturing processes. 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. We recognize manufacturing services revenue as the customer takes control of the manufactured products built to customer specifications. We also generate revenue from our design, development and engineering services, in addition to the sale of other inventory. Revenue is measured based on the consideration specified in a contract with a customer. Under the majority of our manufacturing contracts with customers, the customer controls all of the work-in-progress as products are being built. Revenues under these contracts are recognized progressively based on the cost-to-cost method. For other manufacturing contracts, the customer does not take control of the product until it is completed. Under these contracts, we recognize revenue upon transfer of control of the product to the customer, which is generally when the goods are shipped. Revenue from design, development and engineering services is recognized over time as the services are performed. As a general matter, we assume no significant obligations after shipment as we typically warrant workmanship only. Therefore, warranty provisions are generally not significant. Impact of Certain Factors on Results 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, including conditions affecting the availability of electronic components or the failure of a major customer to pay for components or services, can impact our ability to fulfill 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 54% of our total sales during the three months ended March 31, 2026 and 2025, respectively. Industry supply conditions have reflected varying demand dynamics across end markets and component categories, including periods of imbalance across certain technologies, notably in the memory market. While supply conditions have improved in certain areas compared to prior periods, supply availability and pricing conditions continue to vary across the broader market. We experience fluctuations in gross profit from period to period. Different programs contribute different gross profits depending on the type of services involved, location of production, size of the program, complexity of the product and level of material costs associated with the various products. Moreover, new programs can contribute relatively less to our gross profit in their early stages when manufacturing volumes are usually lower, resulting in inefficiencies and unabsorbed manufacturing overhead costs. During periods of low production volume, we generally have unabsorbed manufacturing overhead costs and reduced gross profit. Gross p [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the consolidated financial statements and notes thereto in Part II, Item 8 of this Report. You should also bear in mind the Risk Factors set forth in Part I, Item 1A, of this Report, any of which could materially and adversely affect the Company’s business, operating results, financial condition and the actual results of the matters addressed by the forward-looking statements contained in the following discussion. 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. 2025 OVERVIEW 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: • Semi-Cap increased by 2% • Industrial remained flat • Medical increased by 7% • A&D increased by 19% • AC&C decreased by 27% 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. 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. We experience fluctuations in gross profit from period to period. Different programs contribute different gross profits depending on the type of services involved, location of production, size of the program, complexity of the product and level of material costs associated with the various products. Moreover, new programs can contribute relatively less to our gross profit in their early stages when manufacturing volumes are usually lower, resulting in inefficiencies and unabsorbed manufacturing overhead costs. During periods of low production volume, we generally have unabsorbed manufacturing overhead costs and reduced gross profit. Gross profit can also be impacted by higher costs associated with other situations, such as supply chain constraints. This includes supply chain premiums for excess component costs paid to secure available supply resulting in revenue with cost recovery only with no margin. In addition, a number of our new program ramps require incremental investment during the launch and ramp phase, which can exert downward pressure on our gross profit. Inflation, interest rates, disruption in the global economy and financial markets, geopolitical events, tariffs and trade restrictions continue to create uncertainty. However, we are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of the date we filed this Report. These estimates may change as new events occur and additional information is obtained. Actual results could differ from these estimates under different assumptions or conditions. 30 RESULTS OF OPERATIONS The financial information and the discussion below should be read in conjunction with the consolidated financial statements and notes thereto in Part II, Item 8 of this Report. The following table presents the percentage relationship that certain items in our consolidated statements of income bear to sales for the periods indicated: Year Ended December 31, 2025 2024 Sales 100.0 % 100.0 % Cost of sales 89.8 89.8 Gross profit 10.2 10.2 Selling, general and administrative expenses 6.0 5.6 Amortization of intangible assets 0.2 0.2 Restructuring charges and other costs 1.1 0.3 Income from operations 2.9 4.1 Other expense, net (0.6 ) (0.9 ) Income before income taxes 2.3 3.2 Income tax expense 1.4 0.8 Net income 0.9 % 2.4 % 2025 Compared With 2024 Sales Sales remained flat in 2025. The percentages of our sales by market sector were as follows: Year Ended December 31, 2025 2024 Semi-Cap 28 % 27 % Industrial 22 22 Medical 18 17 A&D 19 16 AC&C 13 18 Total net sales 100 % 100 % 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. Industrial. 2025 sales increased slightly to $574.7 million from $573.3 in 2024. The slight increase was due to mixed demand. 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. 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. 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. 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. 31 Sales by geographical segment were as follows: Year Ended December 31, (in thousands) 2025 2024 Sales: Americas $ 1,229,439 $ 1,330,361 Asia 1,166,757 1,091,149 Europe 352,546 339,337 Elimination of intersegment sales (89,634 ) (104,742 ) Total sales $ 2,659,108 $ 2,656,105 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. 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. 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. Gross Profit 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. Income from Operations 2025 income from operations declined to $76.0 million from $109.4 million in 2024. Income from operations by reportable segment was as follows: Year Ended December 31, (in thousands) 2025 2024 Income from operations: Americas $ 24,824 $ 40,215 Asia 140,793 140,308 Europe 35,762 26,268 Corporate and intersegment eliminations (125,330 ) (97,380 ) Total income from operations $ 76,049 $ 109,411 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. Asia. 2025 operating income increased slightly to $140.8 million from $140.3 million in 2024. The increase was primarily due to higher revenue. 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. Selling, General and Administrative (SG&A) Expenses SG&A expense increased to $159.7 million in 2025 from $149.5 million in 2024. The increase was primarily due to variable compensation. 32 Amortization of Intangible Assets Amortization of intangible assets was $4.8 million in both 2025 and 2024. Restructuring Charges and Other Costs 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. 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. 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. During 2024, we recognized $6.3 million of restructuring charges primarily due to capacity and workforce reductions at our sites in the Americas. See Note 16 to the consolidated financial statements in Part II, Item 8 of this Report for additional information on our restructuring charges. Interest Expense 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. Interest Income 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. Other Expense, Net 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. Income Tax Expense 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. The Company has been granted certain tax incentives, including tax holidays, for its subsidiaries in Thailand and China 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 incentive in China will expire on December 31, 2026. There is no guarantee of being awarded these tax incentives in the future. In the fourth quarter of 2024, the Company was awarded the China tax holiday retroactive to January 1, 2024 through December 31, 2026. The tax holiday reduces the China tax rate from 25% to 15%. See Note 8 to the consolidated financial statements in Part II, Item 8 of this Report. 33 Net Income 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. LIQUIDITY AND CAPITAL RESOURCES 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. 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. Management believes that our existing cash balances, funds generated from operations, and borrowing availability under our revolving credit facility will be sufficient to permit us to meet our liquidity requirements over the next 12 months. Management further believes that our ongoing cash flows from operations and any borrowings we may incur under our revolving credit facility will enable us to meet operating cash requirements in future years. If we consummated significant acquisitions in the future, our capital needs would increase and could possibly result in our need to increase available borrowings under our Credit Agreement or access public or private debt and equity markets. There can be no assurance, however, that we would be successful in raising additional debt or equity on acceptable terms. 2025 Cash Flows 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. 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. 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. 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. 34 Credit Agreement 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. 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. 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. 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. Share Repurchase Authorization On February 19, 2020, the Board approved an expanded share repurchase authorization, allowing the Company to repurchase up to $150 million in common stock. 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. 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. Dividends 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. The Board of Directors currently intends to continue paying quarterly dividends. However, the Company’s future dividend policy is subject to the Company’s compliance with applicable law, and depending on, among other things, the Company’s results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in the Company’s debt agreements, and other factors that the Board of Directors may deem relevant. Dividend payments are not mandatory or guaranteed; there can be no assurance that the Company will continue to pay a dividend in the future. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements in Part II, Item 8 of this Report, which have been prepared in accordance with accounting principles generally accepted in the United States. Our significant accounting policies are summarized in Note 1 to the consolidated financial statements in Part II, Item 8 of this Report. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, inventories, revenue recognition, income taxes, long-lived assets, stock-based compensation and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. 35 Revenue Recognition Our revenue is recognized when a contract exists and when, or as, we satisfy a performance obligation by transferring control of a product or service to the customer. A contract exists when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. For the Company, the arrangement with the customer is generally documented through a master agreement which outlines the general terms and conditions of the arrangement and a specific purchase commitment from the customer. Our performance obligations are satisfied over time as work progresses or at a point in time. The determination of how our performance obligations are satisfied requires judgment and is assessed on a contract by contract basis. Under the majority of our contracts, our performance obligations are satisfied over time as work progresses since the customer controls all of the work-in-progress as products are being built. For these contracts, the selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We use a cost-based input measurement of progress because it best represents the transfer of assets to the customer. For our other contracts, revenue is recognized upon transfer of control of the product or service, which is generally upon shipment or delivery depending on the terms of the underlying contract. Revenue from design, development and engineering services is generally recognized over time as the services are performed. Generally, there are no subjective customer acceptance requirements or further obligations related to goods or services provided. Our contracts with customers do not allow for a general right of return. Income Taxes 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. 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. 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. 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. Impairment of Long-Lived Assets and Goodwill Long-lived assets, such as property, plant, and equipment and purchased intangible assets, subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount that the carrying amount of the asset exceeds the fair value of the asset. 36 Goodwill is tested for impairment on an annual basis, at a minimum, and whenever events and circumstances indicate that the carrying amount may be impaired. Circumstances that may lead to impairment include unforeseen decreases in future performance or industry demand or the restructuring of our operations as a result of a change in our business strategy. We perform a qualitative assessment to determine if goodwill is potentially impaired. If the qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if we elect not to perform a qualitative assessment, then we would be required to perform a quantitative impairment test for goodwill. This process involves determining the fair values of the reporting units and comparing those fair values to the carrying values, including goodwill, of the reporting units. An impairment loss would be recognized to the extent that the carrying amount exceeds the fair value. For purposes of performing our goodwill impairment assessment, our reporting units are the same as our operating segments as defined in Note 13 to the consolidated financial statements in Part II, Item 8 of this Report. As of December 31, 2025 and 2024, we had $154.0 million of goodwill related to our Americas reporting unit and $38.1 million of goodwill related to our Asia reporting unit. Based on our qualitative assessments of goodwill as of December 31, 2025 and 2024, we concluded that it was more likely than not that the fair value of our Americas and Asia reporting units were greater than their carrying amounts, and therefore no further testing was required. Changes in economic and operating conditions that occur after the annual impairment analysis or an interim impairment analysis, and that impact these assumptions, may result in a future goodwill impairment charge. Recently Enacted Accounting Principles See Note 1 to the consolidated financial statements in Part II, Item 8 of this Report for a discussion of recently enacted accounting principles. CONTRACTUAL OBLIGATIONS We have certain contractual obligations that extend beyond 2025 under lease obligations and debt arrangements. Non-cancellable purchase commitments do not typically extend beyond normal lead-times of 4 to 20 weeks; however, some electronic component manufacturers in the past had lead-times in excess of 52 weeks. Most purchase orders beyond this time frame are normally cancellable; however, during the recent constrained supply chain environment some manufacturers looked to limit their liability by adding non-cancellable, non-renewable (NCNR) terms. We do not use off-balance sheet financing techniques and we have not guaranteed the obligations of any entity that is not one of our wholly owned subsidiaries. A summary of our operating lease obligations as of December 31, 2025 can be found in Note 6 to the consolidated financial statements in Part II, Item 8 of this Report. A summary of our long-term debt obligations as of December 31, 2025 can be found in Note 5 to the consolidated financial statements in Part II, Item 8 of this Report. 37