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What changed in BENCHMARK ELECTRONICS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BENCHMARK ELECTRONICS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+278 added−315 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-24)

Top changes in BENCHMARK ELECTRONICS INC's 2025 10-K

278 paragraphs added · 315 removed · 226 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

153 edited+30 added−57 removed165 unchanged
Biggest changeThese international operations are subject to a number of risks, including: • public health crises, such as that experienced with the COVID pandemic, which can result in varying impacts to our business, employees, customers, suppliers, vendors and partners internationally; • difficulties in staffing and managing foreign operations; • implementation of tariffs on exports from the countries in which we build products; • coordinating communications and logistics across geographic distances and multiple time zones; • less flexible employee relationships, which complicate meeting demand fluctuations and can be difficult and expensive to terminate; • political and economic instability (including acts of terrorism, outbreaks of war, ongoing conflicts, such as between Russia and Ukraine, in Israel and Gaza, and escalating tensions, such as between China and Taiwan as well as China and the U.S., and trade restrictions and tariffs), which could impact our ability to ship and/or receive product or, in the case of tariffs, increase our costs if we are unsuccessful in passing these tariffs on to customers; • changes in foreign or domestic government policies, regulatory requirements and laws, which could impact our business; • longer customer payment cycles and difficulty collecting accounts receivable; 17 • export controls, import duties, customs audits, tariffs, and trade restrictions (including quotas and border taxes); • governmental restrictions on the transfer of funds; • risk of governmental expropriation or seizure of our property; • burdens of complying with a wide variety of foreign laws and labor practices, including various and changing minimum wage regulations; • high inflation and fluctuations in currency exchange rates, which could affect foreign taxes due, component costs, local payroll, utility and other expenses; and • inability to utilize net operating losses incurred by our foreign operations which would increase our overall effective tax rate.
Biggest changeThese international operations are subject to a number of risks, including: • Inability to utilize net operating losses incurred by our foreign operations which would increase our overall effective tax rate; • Political and economic instability (including acts of terrorism, outbreaks of war, ongoing conflicts, such as between Russia and Ukraine, in Israel and Gaza, and escalating tensions, such as between China and Taiwan as well as China and the U.S., and trade restrictions and tariffs), which could impact our ability to ship and/or receive product or, in the case of tariffs, increase our costs if we are unsuccessful in passing these tariffs on to customers; • Export controls, import duties, customs audits, tariffs, and trade restrictions (including quotas and border taxes); • Changes in foreign or domestic government policies, regulatory requirements and laws, which could impact our business; • Longer customer payment cycles and difficulty collecting accounts receivable; • Difficulties in staffing and managing foreign operations and attempting to ensure compliance with our policies, procedures and applicable laws, including various and changing minimum wage regulations; • Coordinating communications and logistics across geographic distances and multiple time zones; • Governmental restrictions on the transfer of funds that have the effect of preventing us from repatriating profits from our foreign subsidiaries; • Public health crises, such as that experienced with the COVID pandemic, which can result in varying impacts to our business, employees, customers, suppliers, vendors and partners internationally • Risk of governmental expropriation or seizure of our property; and • High inflation and fluctuations in currency exchange rates, which could affect foreign taxes due, component costs, local payroll, utility and other expenses.
Our competitors include Celestica Inc., Flex Ltd., Jabil Inc., Plexus Corp, Sanmina Corporation and Kimball Electronics Inc.
Our competitors include Celestica Inc., Flex Ltd., Jabil Inc., Kimball Electronics Inc., Plexus Corp, and Sanmina Corporation.
The Nominating, Sustainability and Governance Committee of our Board of Directors continues to have oversight with regard to environmental, social and governance (ESG) topics and the Company’s ESG/Sustainability Council is currently chaired by our General Counsel & Chief Legal Officer, who is a member of our senior executive leadership team.
The Nominating, Sustainability and Governance Committee of our Board of Directors continues to have oversight with regard to environmental, social and governance (ESG) topics and the Company’s Sustainability Council is currently chaired by our General Counsel & Chief Legal Officer, who is a member of our senior executive leadership team.
For example, it could: • increase our vulnerability to general adverse economic and industry conditions; • impair our ability to obtain additional debt or equity financing in the future for working capital, capital expenditures, acquisitions or other purposes; • require us to dedicate a material portion of our cash flows from operations to the payment of principal and interest on our indebtedness, thereby reducing the availability of our cash flows to fund working capital needs, capital expenditures, acquisitions and other purposes; 24 • expose us to the risk of increased interest rates since the term loan has a variable rate; • limit our flexibility in planning for, or reacting to, changes in our business or industry; • place us at a disadvantage compared to our competitors that have less debt; and • make it more difficult for us to satisfy our debt obligations.
For example, it could: • Increase our vulnerability to general adverse economic and industry conditions; • Impair our ability to obtain additional debt or equity financing in the future for working capital, capital expenditures, acquisitions or other purposes; • Require us to dedicate a material portion of our cash flows from operations to the payment of principal and interest on our indebtedness, thereby reducing the availability of our cash flows to fund working capital needs, capital expenditures, acquisitions and other purposes; • Expose us to the risk of increased interest rates since the term loan has a variable rate; • Limit our flexibility in planning for, or reacting to, changes in our business or industry; • Place us at a disadvantage compared to our competitors that have less debt; and • Make it more difficult for us to satisfy our debt obligations.
These provisions include: • a provision in our certificate of formation granting the Board of Directors authority to issue preferred stock in one or more series and to fix the relative rights and preferences of such preferred stock; • provisions in our bylaws restricting shareholders from acting by less than unanimous written consent and requiring advance notification of shareholder nominations and proposals; • a provision in our bylaws restricting anyone, other than the Chief Executive Officer, the President, the Board of Directors or the holders of at least 10% of all outstanding shares entitled to vote, from calling a special meeting of the shareholders; • a statutory restriction on the ability of shareholders to take action by less than unanimous written consent; and • a statutory restriction on business combinations with some types of interested shareholders.
These provisions include: • A provision in our certificate of formation granting the Board of Directors authority to issue preferred stock in one or more series and to fix the relative rights and preferences of such preferred stock; • Provisions in our bylaws restricting shareholders from acting by less than unanimous written consent and requiring advance 23 notification of shareholder nominations and proposals; • A provision in our bylaws restricting anyone, other than the Chief Executive Officer, the President, the Board of Directors or the holders of at least 10% of all outstanding shares entitled to vote, from calling a special meeting of the shareholders; • A statutory restriction on the ability of shareholders to take action by less than unanimous written consent; and • A statutory restriction on business combinations with some types of interested shareholders.
To enhance our ability to rapidly respond to changes in our customers’ requirements by effectively managing changes in our supply chain, we utilize web-based interfaces and real-time supply chain management software products, which allow for scaling operations to meet customer needs, shifting capacity in response to product demand fluctuations, reducing materials costs and effectively distributing products to our customers or their end customers. 7 • Direct Order Fulfillment .
To enhance our ability to rapidly respond to changes in our customers’ requirements by effectively managing changes in our supply chain, we utilize web-based interfaces and real-time supply chain management software products, which allow for scaling operations to meet customer needs, shifting capacity in response to product demand fluctuations, reducing materials costs and effectively distributing products to our customers or their end customers. • Direct Order Fulfillment .
In addition, our adherence to certain reporting standards or mandated compliance to certain requirements could necessitate additional investments that could impact our profitability, including investments to meet new or enhanced requirements and/or stakeholder expectations to reduce or mitigate the effects of greenhouse gas emissions and transition to low-carbon alternatives, driven by policy and regulations, low-carbon technology advancement and shifting consumer sentiment and societal preferences.
In addition, our adherence to certain reporting standards or mandated compliance to certain requirements could necessitate additional investments that could impact our profitability, including investments to meet new or enhanced requirements and/or stakeholder expectations to reduce or mitigate the effects of greenhouse gas emissions and transition to low-carbon alternatives, driven by policy and regulations, low-carbon technology 20 advancement and shifting consumer sentiment and societal preferences.
Our responses detail our management and oversight of climate-related issues as well as key challenges and opportunities for our Company related to climate change. • Benchmark is pursuing opportunities to expand our renewable energy use by procuring renewable electricity, where available, and installing solar panels on a site-by-site basis. • We understand that energy management involves changing a company’s culture and replacing inefficient equipment.
Our responses detail our management and oversight of climate-related issues as well as key challenges and opportunities for our Company related to climate change. • Benchmark is pursuing opportunities to expand our renewable energy use by procuring renewable electricity, where available, and installing solar panels on a site-by-site basis. 8 • We understand that energy management involves changing a company’s culture and replacing inefficient equipment.
We embrace diverse perspectives, knowing that collaboration drives innovation, better decision-making, and stronger business outcomes. Creating a workplace where employees feel valued, respected, and empowered is essential to our purpose—innovating for a healthier, safer, and better-connected world to create a brighter future. We prioritize inclusion, ongoing development, and career growth through structured training.
We embrace diverse perspectives, knowing that collaboration drives innovation, better decision-making, and stronger business outcomes. Creating a workplace where employees feel valued, respected, and empowered is essential to our purpose—innovating for a healthier, safer, and better-connected world to create a brighter future. We prioritize inclusion, ongoing development, and career growth through structured training and career pathing.
By upholding strong organizational governance and championing ethical business practices, we empower our teams to thrive and make a meaningful impact every day. Culture and Values Benchmark focuses on delivering an engaging employee experience for our team members, creating a workplace where they can build the career of their dreams.
By upholding strong organizational governance and championing ethical business practices, we empower our teams to thrive and make a meaningful impact every day. 10 Culture and Values Benchmark focuses on delivering an engaging employee experience for our team members, creating a workplace where they can build the career of their dreams.
Even if our customers are responsible for the defects, they may not, or may not have resources to, assume responsibility for any costs or liabilities arising from these defects, which could expose us to additional liability claims. 23 Technology Risks If we are unable to maintain our technological and manufacturing process expertise, our business could be adversely affected.
Even if our customers are responsible for the defects, they may not, or may not have resources to, assume responsibility for any costs or liabilities arising from these defects, which could expose us to additional liability claims. Technology Risks If we are unable to maintain our technological and manufacturing process expertise, our business could be adversely affected.
Such laws and regulations could also restrict our ability to modify or expand our facilities, could require us to acquire costly equipment, or could impose other significant expenditures. In addition, our operations may give rise to claims of property contamination or human exposure to hazardous chemicals or conditions. 22 Our worldwide operations are subject to local laws and regulations.
Such laws and regulations could also restrict our ability to modify or expand our facilities, could require us to acquire costly equipment, or could impose other significant expenditures. In addition, our operations may give rise to claims of property contamination or human exposure to hazardous chemicals or conditions. Our worldwide operations are subject to local laws and regulations.
Any such violation, even if prohibited by our policies, could have a material adverse effect on our business. 18 Start-up costs and inefficiencies related to new or transferred programs can adversely affect our operating results and such costs may not be recoverable if the new programs or transferred programs are cancelled.
Any such violation, even if prohibited by our policies, could have a material adverse effect on our business. Start-up costs and inefficiencies related to new or transferred programs can adversely affect our operating results and such costs may not be recoverable if the new programs or transferred programs are cancelled.
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 higher reliability requirements.
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.
Our Chief Human Resources Officer and other key leaders in our organization update the Human Capital and Compensation Committee on our strategy for talent development and retention, including succession planning for key positions in the Company. Health and Safety The safety of our employees is also of paramount concern to us.
Our Chief Human Resources Officer and other key leaders in our organization update the Human Capital and Compensation Committee on our strategy for talent development and retention, including succession planning for key positions in the Company. 11 Health and Safety The safety of our employees is also of paramount concern to us.
We believe these efforts strengthen our enterprise ethics and compliance efforts and foster an environment where employees and stakeholders can express and have concerns resolved. Our Community and Supply Chain Responsibility We are committed to sourcing from suppliers willing to support our sustainability initiatives.
We believe these efforts strengthen our enterprise ethics and compliance efforts and foster an environment where employees and stakeholders can express and have concerns resolved. 9 Our Community and Supply Chain Responsibility We are committed to sourcing from suppliers willing to support our sustainability initiatives.
Our customers are OEMs of: • industrial equipment; • aerospace and defense systems; • telecommunication equipment; • computer systems and high performance compute platforms; • medical devices; and • semi-cap equipment. These markets are subject to rapid technological change, vigorous competition, product life variability and consequent product obsolescence.
Our customers are OEMs of: • Industrial equipment; • Aerospace and defense systems; • Telecommunication equipment; • Computer systems and high-performance computer platforms; • Medical devices; and • Semi-cap equipment. These markets are subject to rapid technological change, vigorous competition, product life variability and consequent product obsolescence.
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 customer's design process flow. We provide these services across all the industries we serve.
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.
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 this Annual Report on Form 10-K for the year ended December 31, 2024 (the Report) and in any of the Company’s subsequent reports filed with the Securities and Exchange Commission (SEC).
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 this Annual Report on Form 10-K for the year ended December 31, 2025 (the Report) and in any of the Company’s subsequent reports filed with the Securities and Exchange Commission (SEC).
Our inability to do so could have an adverse effect on us. We may be affected by consolidation in the electronics industry, which could create increased pricing and competitive pressures on our business.
Our inability to do so could have an adverse effect on us. 18 We may be affected by consolidation in the electronics industry, which could create increased pricing and competitive pressures on our business.
These factors include: • the volume of customer orders relative to our capacity; • customer introduction and market acceptance of new products; • changes in demand for customer products; • seasonality in demand for customer products; • pricing and other competitive pressures; • the timing of our expenditures in anticipation of future orders; • our effectiveness in managing manufacturing processes; • changes in cost and availability of labor and components, including due to recent labor and supply constraints and inflation; • changes in our product mix; • changes in tax laws in the jurisdictions in which we operate; • changes in tariffs, trade agreements and other trade protection measures; • fluctuations in currency exchange rates; 25 • changes in political and economic conditions; • disruptions caused by computer malfunctions or cybersecurity incidents; and • local factors and events that may affect our production volume, such as local holidays, pandemics or natural disasters.
These factors include: • The volume of customer orders relative to our capacity; • Customer introduction and market acceptance of new products; • Changes in demand for customer products; • Seasonality in demand for customer products; • Pricing and other competitive pressures; • The timing of our expenditures in anticipation of future orders; • Our effectiveness in managing manufacturing processes; • Changes in cost and availability of labor and components, including due to recent labor and supply constraints and inflation; • Changes in our product mix; • Changes in tax laws or interpretations of our tax positions in the jurisdictions in which we operate; • Changes in tariffs, trade agreements and other trade protection measures; • Fluctuations in currency exchange rates; • Changes in political and economic conditions; • Disruptions caused by computer malfunctions or cybersecurity incidents; and • Local factors and events that may affect our production volume, such as local holidays, pandemics or natural disasters.
In addition, a proxy contest for the election of directors would require us to incur significant fees and expenses, as well as requiring significant time and attention by management and our Board of Directors.
In addition, a proxy contest for the election of directors would require us to incur significant fees and expenses, as well as require significant time and attention by management and our Board of Directors.
Thus, any disruption in operations at a facility with specialized certifications could adversely affect our ability to provide products and services to our customers, and thus negatively affect our relationships and 19 financial results.
Thus, any disruption in operations at a facility with specialized certifications could adversely affect our ability to provide products and services to our customers, and thus negatively affect our relationships and financial results.
Our comprehensive set of PCBA manufacturing technologies and solutions, include: ▪ Surface Mount Technology ▪ Substrate Technology; Rigid Epoxy, Flex, Ceramic, Glass, Rigid-Flex ▪ Pin-in-Paste Technology ▪ Conformal Coating and Potting ▪ RoHS Soldering Processes ▪ Wafer-Level CSP (WLCSP) ▪ Microelectronics ▪ Mixed SMT and Microelectronics Assembly ▪ Flip Chip ▪ Chip-on-Board and Wire-Bonding ▪ Inspection and Test Solutions ▪ Automated Optical Inspection (2D & 3D) ▪ Automated X-ray Inspection ▪ Flying Probe ▪ Boundary Scan Test ▪ In-Circuit Test ▪ Board Level Functional Testing ▪ Device/System Integration Functional Test ▪ Electrical Safety Test ▪ Microelectronics Test and Tune; and ▪ Vibration, ESS, HASS and HALT 4 We also provide specialized solutions in support of our customers’ components, products and systems, which include: ▪ Conformal Coating and Potting; ▪ Underfill and Encapsulation; ▪ Ultrasonic Welding; ▪ Automation Solutions; ▪ Fluidics Assembly; ▪ Precision Alignment for Optical Applications; ▪ Water cooled systems assembly and test; ▪ Hybrid Optical/Electrical Printed Circuit Board Assembly and Testing; and ▪ Sub-Micron Alignment of Optical Sub-Assemblies. • Component Engineering Services .
Our comprehensive set of PCBA manufacturing technologies and solutions include: ▪ Surface Mount Technology ▪ Substrate Technology: Rigid Epoxy, Flex, Ceramic, Glass, Rigid-Flex ▪ Pin-in-Paste Technology ▪ Conformal Coating and Potting ▪ RoHS Soldering Processes ▪ Wafer-Level CSP (WLCSP) ▪ Microelectronics ▪ Mixed SMT and Microelectronics Assembly ▪ Flip Chip ▪ Chip-on-Board and Wire-Bonding 3 ▪ Inspection and Test Solutions ▪ Automated Optical Inspection (2D & 3D) ▪ Automated X-ray Inspection ▪ Flying Probe ▪ Boundary Scan Test ▪ In-Circuit Test ▪ Board Level Functional Testing ▪ Device/System Integration Functional Test ▪ Electrical Safety Test ▪ Microelectronics Test and Tune; and ▪ Vibration, ESS, HALT, and HASS We also provide specialized solutions in support of our customers’ components, products and systems, which include: ▪ Conformal Coating and Potting; ▪ Underfill and Encapsulation; ▪ Ultrasonic Welding; ▪ Automation Solutions; ▪ Fluidics Assembly; ▪ Precision Alignment for Optical Applications; ▪ Liquid-cooled systems assembly and test; ▪ Hybrid Optical/Electrical Printed Circuit Board Assembly and Testing; and ▪ Sub-Micron Alignment of Optical Sub-Assemblies. • Component Engineering Services .
Specialized analytical skill sets associated with electrical, mechanical, and metallurgical disciplines are used in conjunction with a vast array of equipment such as ion chromatography, x-ray florescence, and scanning electron microscopy. Our state-of-the-art lab facilities provide customers with detailed reporting and support in an unbiased, timely and cost-effective manner.
Specialized analytical skill sets associated with electrical, mechanical, and metallurgical disciplines are used in conjunction with a vast array of equipment, such as ion chromatography, x-ray fluorescence, and scanning electron microscopy. Our state-of-the-art lab facilities provide customers with detailed reporting and support in an unbiased, timely and cost-effective manner.
Anticipated orders from many of our customers have, in the past, failed to materialize or delivery schedules have been deferred as a result of changes in our customers’ business needs, thereby adversely affecting our results of operations due to inefficient use of manufacturing capacity, increasing inventory balances and potential write-downs or write-offs of obsolete or unsold inventory.
Anticipated orders from many of our customers have, in the past, failed to materialize or delivery schedules have been deferred as a result of changes in our customers’ business needs, thereby adversely affecting our results of operations due to inefficient use of manufacturing capacity, increased inventory balances and potential write-downs or write-offs of obsolete or unsold inventory.
Delays, cost overruns or product failures, in connection with one or more contracts, could lead to their termination and negatively impact our results of operations, financial condition or liquidity. We can give no assurance that we will be awarded new contracts to offset the revenues lost as a result of such a termination.
Delays, cost overruns or product failures, in connection with one or more contracts, could lead to their termination and negatively impact our results of operations, financial condition or liquidity. We can give no assurance that we will be awarded new contracts to offset the revenue lost as a result of such a termination.
However, competition from Asian ODMs may also decrease due to US OEMs reluctance to rely solely on manufacturing services from Chinese or Taiwanese based ODMs due to concerns about increasing tariffs and government regulations that may impact an efficient global supply chain. Sustainability Benchmark continues to evolve and improve upon its Sustainability strategy.
However, competition from Asian ODMs may also decrease due to US OEMs' reluctance to rely solely on manufacturing services from Chinese or Taiwanese based ODMs due to concerns about increasing tariffs and government regulations that may impact an efficient global supply chain. Sustainability Benchmark continues to evolve and improve upon its Sustainability strategy.
Accordingly, our business, cash flows, results of operations and financial condition could suffer if we lose time-sensitive sales, incur additional freight costs or are unable to pass on price increases and costs related tariffs to our customers. We are dependent on the success of our customers and the markets in which they operate.
Accordingly, our business, cash flow, results of operations and financial condition could suffer if we lose time-sensitive sales, incur additional freight costs or are unable to pass on price increases and costs related to tariffs to our customers. We are dependent on the success of our customers and the markets in which they operate.
In addition, by developing long-term relationships with suppliers, we endeavor to minimize the effects of component shortages compared to manufacturers without such relationships. The goal of these procedures is to reduce our inventory risk. Our efforts to reduce inventory risk could prove difficult, exposing us to inventory risk related to obsolete or unsold inventory.
In addition, by developing long-term relationships with suppliers, we endeavor to minimize the effects of component shortages compared to manufacturers without such relationships. The goal of these procedures is to reduce our inventory risk. Our efforts to reduce inventory risk could prove difficult, exposing us to inventory risk related to obsolete or excess component inventory.
As mentioned above, we established an ESG/Sustainability Council with Board oversight to drive the four tenets of our long-term Sustainability strategy: Environmental Responsibility, Our People, Governance and Our Community. Our commitment to sustainability and these tenets is a strategic and operational imperative as we build a sustainable infrastructure across the Company.
As mentioned above, we established a Sustainability Council with Board oversight to drive the four tenets of our long-term Sustainability strategy: Environmental Responsibility, Our People, Governance and Our Community. Our commitment to sustainability and these tenets is a strategic and operational imperative as we build a sustainable infrastructure across the Company.
Our materials strategy focuses on leveraging our procurement volume companywide while providing local execution for maximum flexibility. We employ a full complement of electronic data interchange transactions with our suppliers to coordinate forecasts, orders, reschedules, and inventory and component lead times.
Our materials strategy focuses on leveraging our global procurement volume while providing local execution for maximum flexibility. We employ a full complement of electronic data interchange transactions with our suppliers to coordinate forecasts, orders, reschedules, and inventory and component lead times.
In support of our engineering services, technology solutions and manufacturing services, we offer our customers a wide array of capabilities from early supply chain design, to order fulfillment, to aftermarket services. • Value-Added Support System s. We support our engineering, manufacturing, distribution and aftermarket support services with an efficient supply chain management system and a superior quality management program.
In support of our engineering services and manufacturing services, we offer our customers a wide array of capabilities from early supply chain design, to order fulfillment, to aftermarket services. • Value-Added Support System s. We support our engineering, manufacturing, distribution and aftermarket support services with an efficient supply chain management system and a superior quality management program.
We enter into master supply agreements with the majority of our customers, which generally governs the conduct of our business with customers relating to, among other things, the design and manufacturing of products that in some cases were previously manufactured internally at the customer.
We enter into master supply agreements with the majority of our customers, which generally governs the conduct of our business with customers relating to, among other things, the design and manufacturing of products that in some cases were previously manufactured internally by the customer.
Our PT services and complex mechanical manufacturing, along with our systems integration assembly and direct order fulfillment services, enable our customers to potentially reduce product cost and risk of product obsolescence by reducing their total work-in-process and finished goods inventory.
Our PMM services and complex mechanical manufacturing, along with our systems integration assembly and direct order fulfillment services, enable our customers to potentially reduce product cost and risk of product obsolescence by reducing their total work-in-process and finished goods inventory.
If any of these new programs or new customer relationships were terminated, our operating results could be harmed, particularly in the short-term. We may not be able to recoup these start-up costs or replace anticipated new program revenues.
If any of these new programs or new customer relationships are terminated, our operating results could be harmed, particularly in the short-term. We may not be able to recoup these start-up costs or replace anticipated new program revenues.
Served markets include: commercial 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. In this Report, references to Benchmark, the Company or use of the words “we,” “our” and “us” include Benchmark’s subsidiaries unless otherwise noted.
Served markets include: advanced computing and communication (AC&C), aerospace and defense (A&D), industrial, medical and semiconductor capital equipment (semi-cap). The Company has manufacturing operations located in the United States and Mexico (the Americas), Asia and Europe. In this Report, references to Benchmark, the Company or use of the words “we,” “our,” and “us” include Benchmark’s subsidiaries unless otherwise noted.
We offer a full spectrum of new product design, automation, test development, prototype and related engineering services for projects contracted by our customers who pay for and maintain ownership of the resulting designs in our contract design services business.
We offer a full spectrum of new product design, automation, test development, prototype and related engineering services for projects contracted by our customers who pay for and maintain ownership of the resulting designs and intellectual property in our contract design services business.
The Company’s Sustainability Report, published each year, aligns with the Sustainability Accounting Standards Board and other frameworks such as the Global Reporting Initiative (GRI), United Nations Sustainable Development Goals and the Task Force on Climate-Related Financial Disclosures (TCFD)(recently changed into the Sustainability Disclosure Standards). We expect to publish our 2024 Sustainability Report in the first quarter of 2025.
The Company’s Sustainability Report, published each year, aligns with the Sustainability Accounting Standards Board and other frameworks such as the Global Reporting Initiative (GRI), United Nations Sustainable Development Goals and the Task Force on Climate-Related Financial Disclosures (TCFD) (recently changed to the Sustainability Disclosure Standards). We expect to publish our 2025 Sustainability Report in the first quarter of 2026.
In the AC&C markets, we focus on customers with more complex requirements (high performance computing, water cooled systems and next-generation broadband solutions) as compared to more commoditized offerings within the broader computing and telecommunications markets.
In the AC&C markets, we focus on customers with more complex requirements (high-performance computing, liquid-cooled systems, and next-generation broadband solutions) as compared to more commoditized offerings within the broader computing and telecommunications markets.
Outsourcing rates fluctuate periodically, and not all industries we serve outsource at the same rate. Historically, the computing and telecommunications markets have been early to adopt the outsourcing model and are currently the most fully penetrated. This compares to the traditionally lower level of outsourcing within our other served markets in medical, industrial, A&D and semi-cap.
Outsourcing rates fluctuate periodically, and not all industries we serve outsource at the same rate. Historically, the computing and telecommunications markets were early to adopt the outsourcing model and are currently the most fully penetrated. This compares to the traditionally lower level of outsourcing within our other served markets in medical, industrial, A&D, and semi-cap.
We employ a proven seven-step process from concept-to-production in our design services model which enables a shorter product development cycle and provides our customers with a competitive advantage in time-to-market and time-to-profit.
We employ a proven seven-step methodology from concept-to-production in our design services model, which enables a shorter product development cycle and provides our customers with a competitive advantage in time-to-market and time-to-profit.
Governance We are committed to ensuring ethical organizational governance, promoting business ethics and integrity, and embracing diversity, equity and inclusion in the boardroom and throughout the organization. Benchmark has comprehensive corporate governance policies and structures in place to foster accountability and transparency.
Governance We are committed to ensuring ethical organizational governance, promoting business ethics and integrity, and embracing inclusion in the boardroom and throughout the organization. Benchmark has comprehensive corporate governance policies and structures in place to foster accountability and transparency.
Perceived uncertainties as to our future direction also could affect the market price and volatility of our shares of common stock, our ability to attract and retain qualified personnel and business partners and may affect our relationships with vendors, customers or others. 27 Item 1B. Unresolve d Staff Comments None.
Perceived uncertainties regarding our future direction also could affect the market price and volatility of our shares of common stock, our ability to attract and retain qualified personnel and business partners and may affect our relationships with vendors, customers or others. Item 1B. Unresolve d Staff Comments None.
Further, developments adverse to our major customers or their products, or the failure of a major customer to pay for components or services, could have an adverse effect on us. Sales to our ten largest customers represented 50%, 52% and 52% of our total sales in 2024, 2023 and 2022, respectively.
Further, developments adverse to our major customers or their products, or the failure of a major customer to pay for components or services, could have an adverse effect on us. Sales to our ten largest customers represented 51%, 50% and 52% of our total sales in 2025, 2024 and 2023, respectively.
All reports we file with the SEC are also available free of charge via EDGAR through the SEC’s website at https://www.sec.gov . 14 Item 1A .
All reports we file with the SEC are also available free of charge via EDGAR through the SEC’s website at https://www.sec.gov . 12 Item 1A .
We may encounter significant delays or defaults in payments owed to us by customers for products we have manufactured or components we have produced that are unique to particular customers. We structure our agreements with customers to mitigate our risks related to obsolete or unsold inventory.
We may encounter significant delays or defaults in payments owed to us by customers for products we have manufactured or components we have produced that are unique to particular customers. We structure our agreements with customers to mitigate our risks related to obsolete or excess component inventory.
Any such shortages or delays, including due to natural disasters or geopolitical issues or conflicts, could result in delays in shipments to our customers, which would reduce our revenue, margins and operating cash flow for the periods affected.
Any reoccurrence of such shortages or delays, including due to natural disasters or geopolitical issues or conflicts, could again result in delays in shipments to our customers, which would reduce our revenue, margins and operating cash flow for the periods affected.
We have and may continue to bear the risk of component price increases that occur between periodic re-pricings of products during the term of a customer contract. If shortages or delays in component products persist, the price of certain components may increase further or we may be exposed to quality issues, including the risk of receiving counterfeit parts.
We have and may continue to bear the risk of component price increases that occur between periodic repricings of products during the term of a customer contract. If any shortages or delays in component products persist, the price of certain components may increase further or we may be exposed to quality issues, including the risk of receiving counterfeit parts.
In all markets we target, our focus is concentrated within higher complexity sub-sectors, which are often highly regulated, in which our unique capabilities and skills enable us to differentiate from our competitors. Today, we believe that each of our market sectors is high value and well-aligned with our expertise in more complex products.
In all markets we target, our focus is concentrated within higher complexity sub-sectors, which are often highly regulated, in which our unique capabilities and skills enable us to differentiate from our competitors. Each of our market sectors is high-value and well-aligned with our expertise in complex products.
The following table sets forth the percentages of our sales by market sector: Year Ended December 31, 2024 2023 2022 Semi-Cap 27 % 23 % 25 % Industrial 22 21 21 Medical 17 20 21 A&D 16 13 12 AC&C 18 23 21 Total sales 100 % 100 % 100 % 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.
The following table sets forth the percentages of our sales by market sector: Year Ended December 31, 2025 2024 2023 Semi-Cap 28 % 27 % 23 % Industrial 22 22 21 Medical 18 17 20 A&D 19 16 13 AC&C 13 18 23 Total sales 100 % 100 % 100 % 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.
Reductions in electricity, natural gas and water usage are routinely achieved because of the numerous energy reduction projects implemented by the competition participants. • In 2024, we issued our third company-wide response to the Climate Disclosure Project questionnaire on climate change and our second response on water security.
Reductions in electricity, natural gas and water usage are routinely achieved because of the numerous energy reduction projects implemented by the competition participants. • In 2025, we issued our fourth company-wide response to the Climate Disclosure Project questionnaire on climate change and our third response on water security.
Our THRIVE mentorship program, which expanded globally in 2024, connects employees with experienced mentors to navigate career challenges, build leadership skills, and maximize their impact. We offer competitive compensation and benefits packages that reflect the needs of our workforce. For our U.S. operations, we offer medical, dental, and vision benefits, disability coverage, survivor benefits, and a wellness program.
Our THRIVE mentorship program connects employees with experienced mentors to navigate career challenges, build leadership skills, and maximize their impact. We offer competitive compensation and benefits packages that reflect the needs of our workforce. For our U.S. operations, we offer medical, dental, and vision benefits, disability coverage, survivor benefits, and a wellness program.
Benchmark Precision Technologies brings critical tolerance capability to metal fabrication and assembly, building components, sub-assemblies, and full module assemblies for highly regulated industries, including semi-cap, A&D, medical and industrial.
Benchmark Precision Technologies brings critical tolerance capability to metal fabrication and assembly, building components and sub-assemblies for highly regulated industries, including A&D, medical, and semi-cap.
We provide vertically integrated precision mechanical components and complex electromechanical assemblies. 5 The processes supporting these include: ▪ Complex Small / Medium / Large Precision Machining; ▪ Advanced metal joining including vacuum chamber welding, electron beam laser and brazing; ▪ Multi-Axis Robotic Grinding for demanding applications such as turbine blades and scientific instruments; ▪ Complex Clean Room Assembly and Functional Test; ▪ Major Electromechanical Assemblies; ▪ Large precision and industrial frame fabrication, welding, grinding, bead blasting and coating; and ▪ Sheet metal forming, powder coating and painting.
We provide vertically integrated precision mechanical components and complex electromechanical assemblies. 4 The processes supporting these include: ▪ Complex small / medium / large precision machining; ▪ Advanced metal joining, including vacuum chamber welding, electron beam welding, and brazing; ▪ Multi-axis robotic grinding for demanding applications such as turbine blades and scientific instruments; ▪ Complex clean room assembly and functional testing; ▪ Integration of major electromechanical assemblies; ▪ Large precision and industrial frame fabrication, welding, grinding, bead blasting, and powder coating; and ▪ Sheet metal forming, powder coating, and painting.
In 2024, the Korat site again received the platinum-class award for its Zero Accident Campaign, marking the eighth consecutive year the facility was specifically recognized by the Thailand’s Department of Labour Protection and Welfare, Ministry of Labour for its work in this area.
In 2025, the Korat site again received the platinum-class award for its Zero Accident Campaign, marking the ninth consecutive year the facility was specifically recognized by the Thailand’s Department of Labour Protection and Welfare, Ministry of Labour for its work in this area.
See Note 1(i) to the consolidated financial statements in Part II, Item 8 of this Report. We may be exposed to interest rate fluctuations. We have exposure to interest rate risk on our outstanding borrowings under our variable rate credit agreement.
See Note 4 to the consolidated financial statements in Part II, Item 8 of this Report. 22 We may be exposed to interest rate fluctuations. We have exposure to interest rate risk on our outstanding borrowings under our variable rate credit agreement.
Benchmark does not directly source 3TG from mines, smelters or refiners, and is in most cases several or more levels removed from these supply chain participants. 11 Benchmark therefore expects our suppliers to: • utilize responsible sourcing practices per the Benchmark Conflict Minerals policy and endeavor to purge all high-risk smelters from their supply chain. • preferentially source 3TG from smelters and refiners validated as being conflict free and do not directly or indirectly benefit or finance armed groups in any Covered Country. • fully-comply with the Conflict Minerals Law and provide all necessary Conflict Minerals (3TG) declarations. • have a credible, robust conflict minerals program (3TG) which should include: a written conflict minerals policy, communication of requirements to suppliers, CM data collection using the Responsible Minerals Initiative’s Conflict Minerals Reporting Template (RMI CMRT), a professional analysis and risk assessment with corrective action on the basis of the CMRTs collected from the suppliers. • pass these requirements through their supply chain and determine the 3TG sources (Smelters or Refiners – SORs). • for suppliers representing the top 90% of our global corporate materials spend (our yearly corporate sample), provide their most recent RMI CMRT form, complete and accurate in the latest version with robust comments where appropriate, during our active yearly CM data collection campaign.
Benchmark therefore expects our suppliers to: • Utilize responsible sourcing practices per the Benchmark Conflict Minerals policy and endeavor to purge all high-risk smelters from their supply chain. • Preferentially source 3TG from smelters and refiners validated as being conflict free and do not directly or indirectly benefit or finance armed groups in any Covered Country. • Fully comply with the Conflict Minerals Law and provide all necessary Conflict Minerals (3TG) declarations. • Have a credible, robust conflict minerals program (3TG) which should include: a written conflict minerals policy, communication of requirements to suppliers, CM data collection using the Responsible Minerals Initiative’s Conflict Minerals Reporting Template (RMI CMRT), a professional analysis and risk assessment with corrective action based on the CMRTs collected from the suppliers. • Pass these requirements through their supply chain and determine the 3TG sources (Smelters or Refiners – SORs). • For suppliers representing the top 80% of our global corporate materials spend (our yearly corporate sample), provide their most recent RMI CMRT form, complete and accurate in the latest version with robust comments where appropriate, during our active yearly CM data collection campaign.
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 US based national and multi-national original equipment manufacturers (OEMs).
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 multinational original equipment manufacturers (OEMs).
If our systems for protecting against cybersecurity risks prove not to be sufficient, we could be adversely affected by, among other things: loss of or damage to intellectual property, proprietary or confidential information, or customer, supplier, or employee data; interruption of our business operations; and increased costs required to prevent, respond to, or mitigate cybersecurity attacks.
If our systems for protecting against cybersecurity risks prove not to be sufficient, we could be adversely affected by, among other things: loss of or damage to intellectual property, proprietary or confidential information, or customer, supplier, or employee data; interruption of our business operations; higher insurance premiums; 21 government investigations; and increased costs required to prevent, respond to, or mitigate cybersecurity attacks.
In particular, as discussed further below, our operations have been, and may in the future be, subject to ransomware or cyber-extortion attacks, which could significantly disrupt our operations. Generally, such attacks involve restricting access to computer systems or the restriction or theft of vital data including customer supplied data.
Our operations have been, and may in the future be, subject to ransomware or cyber-extortion attacks, which could significantly disrupt our operations. Generally, such attacks involve restricting access to computer systems or the restriction or theft of vital data including customer supplied data.
These services are available at many of our manufacturing locations worldwide and allow us to offer customers the flexibility to move quickly from design and initial product introduction to production and distribution.
These services are available at many of our manufacturing locations worldwide and allow us to offer customers the flexibility to move quickly from design and initial product introduction to production and distribution. • Operational Excellence & Footprint Optimization.
These policies reflect our underlying commitment to maintain the highest standards of ethics and integrity and to operate our business in compliance with all applicable laws and regulations, including anti-corruption, anti-bribery, and antitrust.
These policies reflect our underlying commitment to maintaining the highest standards of ethics and integrity and to operating our business in compliance with all applicable laws and regulations, including anti-corruption, anti-bribery, and antitrust.
This refined talent strategy attracts and retains top talent and a culture enriched by the core values we live every day. Building strong connections within our teams is key to this approach. Our Employee Resource Groups (ERGs) provide spaces for employees to support one another, share ideas, and champion inclusion across our global workforce.
This refined talent strategy attracts and retains top talent and a culture enriched by the core values we live every day. Building strong connections within our teams is key to this approach. Our Inclusion Council provides spaces for employees to support one another, share ideas, and champion inclusion across our global workforce.
A significant and sustained decline in our market capitalization could result in material charges in future periods that could be adverse to our operating results and financial position. As of December 31, 2024, we had $192.1 million in goodwill and $44.4 million of identifiable intangible assets.
A significant and sustained decline in our market capitalization could result in material charges in future periods that could be adverse to our operating results and financial position. As of December 31, 2025, we had $192.1 million in goodwill and $38.8 million of identifiable intangible assets.
By leveraging our advanced technology building blocks and engineering solutions, our customers can focus their efforts on branding and go-to-market, while relying on us as a trusted partner to deliver products faster and more efficiently. • Maintain and Develop Close, Long-Term Relationships with our Customers .
By leveraging engineering solutions, our customers can focus their efforts on innovation, building their brands and go-to-market, while relying on us as a trusted partner to deliver products faster and more efficiently. • Maintain and Develop Close, Long-Term Relationships with our Customers .
To support customers across these sectors, we have strategically invested in geographically diverse manufacturing locations and global supply chain capabilities. In addition, we believe that a strong focus on human capital through the talent we hire and retain is critical to maintaining our competitiveness.
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.
For additional information, see “Risk Factors—Shortages or price increases of components specified by our customers have in the past delayed and could adversely affect our profitability” in Part I, Item 1A of this Report.
For additional information, see “Risk Factors—Shortages or price increases of components specified by our customers have in the past delayed, and could continue to delay, shipments, which may adversely affect our profitability” in Part I, Item 1A of this Report.
Consequently, references to 2024 relate to the calendar year ended December 31, 2024; references to 2023 relate to the calendar year ended December 31, 2023, etc. General Benchmark Electronics, Inc. (Benchmark or 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.
Consequently, references to 2025 relate to the calendar year ended December 31, 2025; references to 2024 relate to the calendar year ended December 31, 2024, etc. General Benchmark Electronics, Inc. (Benchmark or the Company) is a Texas corporation that provides design engineering and advanced manufacturing services that include both electronic manufacturing services (EMS) and precision metal machining (PMM) services.
As of December 31, 2024, our total outstanding debt (excluding unamortized debt issuance costs and finance leases) was $257.0 million, all of which represented borrowings under our credit facility). Our level of indebtedness could have important consequences.
As of December 31, 2025, our total outstanding debt (excluding unamortized debt issuance costs and finance leases) was $213.1 million, all of which represented borrowings under our credit facility. Our level of indebtedness could have important consequences.
Changes that impact the way we operate internally could have a negative impact on us and reduce the demand for our foreign manufacturing facilities. Moreover, any regulatory actions by other countries where we operate could also negatively impact our financial performance. In addition, changes in policies by the U.S.
Changes that impact the way we operate internationally could have a negative impact on us and reduce the demand for our foreign manufacturing facilities. Moreover, any regulatory actions by other countries where we operate could also negatively impact our financial performance.
As of December 31, 2024, we employed approximately 11,700 people, approximately 306 of whom were engaged in design and development engineering. Additionally, our contractor workforce included approximately 821 people. None of our domestic employees are represented by a labor union. In certain international locations, our employees are represented by labor unions and by works councils.
As of December 31, 2025, we employed approximately 11,840 people, approximately 330 of whom were engaged in design and development engineering. Additionally, our contractor workforce included approximately 740 people. None of our domestic employees are represented by a labor union. In certain international locations, our employees are represented by labor unions and by works councils.
Sales to our ten largest customers represented 50%, 52% and 52% of our total sales in 2024, 2023 and 2022, respectively. Sales to our largest customer, Applied Materials, Inc. and subsidiaries, represented 14%, 12% and 15% of our total sales in 2024, 2023 and 2022, respectively.
Sales to our ten largest customers represented 51%, 50% and 52% of our total sales in 2025, 2024 and 2023, respectively. Sales to our largest customer, Applied Materials, Inc. and subsidiaries, represented 14% of our total sales in both 2025 and 2024 and 12% of our total sales in 2023.
Benchmark Precision Technologies’ capabilities go well beyond the typical machine shop in that they can design and engineer a prototype, transition it to an accelerated manufacturing protocol center to prepare for full volume production, and then shift it to any of Benchmark’s global manufacturing facilities. • Precision Technologies Group .
Benchmark Precision Technologies’ capabilities go well beyond the typical machine shop in that they can design and engineer a prototype, transition it to an accelerated manufacturing ramp center to prepare for full volume production, and then shift it to any of Benchmark’s global manufacturing facilities for further higher level of integration or system assembly. • Precision Technologies Group .
(the Company) for first quarter and fiscal year 2025 results, future operating results or margins, the ability to generate sales and income or cash flow, expected revenue mix, the Company’s business strategy and strategic initiatives, the Company’s repurchases of shares of its common stock, the Company’s expectations regarding restructuring charges and amortization of intangibles, and the Company’s intentions concerning the payment of dividends, among others, are forward-looking statements.
(the Company) for first quarter and 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.
Benchmark endorses the Responsible Business Alliance (RBA) (formerly the Electronics Industry Citizenship Coalition or EICC) Code of Conduct, which provides guidance in five critical areas of corporate social responsibility performance, including labor, health and safety, environment, management systems, and ethics.
Benchmark endorses the Responsible Business Alliance (RBA) Code of Conduct, which provides guidance in five critical areas of corporate social responsibility performance, including labor, health and safety, environment, management systems, and ethics.
Events relating to the possibility of customer demand fluctuations, supply chain constraints, continuing inflationary pressures, the effects of foreign currency fluctuations, high interest rates, geopolitical uncertainties including continuing hostilities and tensions, trade restrictions and sanctions, tariffs, 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.
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 excess components 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.
In addition, increased costs of our suppliers or partners could be passed along to us, and we may not be able to increase our product prices enough to offset them. Moreover, any increase in our product prices may reduce our future customer orders and profitability.
In addition, increased costs of our suppliers or partners could be passed along to us, and we may not be able to increase our product prices enough to offset them.
Current U.S. federal government spending levels for defense-related or other programs may not be sustained, and future spending and program authorizations may not increase or may decrease or shift to programs in areas where we do not provide services or are less likely to be awarded contracts.
Current U.S. federal government spending 16 levels for defense-related or other programs may not be sustained, and future spending and program authorizations may not increase or may decrease on programs from which we expect to derive a portion of future revenues, or shift to programs in areas where we do not provide services or are less likely to be awarded contracts.
Our projections of results and successful integration of acquired operations into our network involve risks, including: • integration and management of the operations; • as noted above, demand can vary, and our projections of results may be wrong due to deferred or reduced demand; • retention of key personnel; • integration of purchasing operations and information systems; • retention of the customer base of acquired businesses; • management of an increasingly larger and more geographically disparate business; • the possibility that past transactions or practices may lead to future commercial or regulatory risks; • diversion of management’s attention from other ongoing business concerns; and • inadequate internal control over financial reporting and our ability to bring such controls into compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 in a timely manner.
Our projections of results and successful integration of acquired operations into our network involve risks, including: • Integration and management of the operations; • As noted above, demand can vary, and our projections of results may be wrong due to deferred or reduced demand; • Retention of key personnel; • Integration of purchasing operations and information systems; • Retention of the customer base of acquired businesses; • Management of an increasingly larger and more geographically disparate business; • The possibility that past transactions or practices may lead to future commercial or regulatory risks; • Diversion of management’s attention from other ongoing business concerns; and • Inadequate internal control over financial reporting and our ability to bring such controls into compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 in a timely manner. 24 Our profitability will suffer if we are unable to successfully integrate an acquisition, if the acquisition does not further our business strategy as we expected or if we do not achieve sufficient revenue to offset the increased expenses associated with these acquisitions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs of the date of this filing, we are not aware of any risks from cybersecurity threats, including any previous cybersecurity incidents since the ransomware incident in the fourth quarter of fiscal 2019 described under “Our operations are subject to cyberattacks that could have a material adverse effect on our business” in Part I, Item 1A of this Report, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
Biggest changeAs of the date of this filing, we are not aware of any risks from cybersecurity threa ts, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
Regular communications remind all employees of how to be vigilant against cyberattacks. We have also recently implemented a third-party cybersecurity risk management program that continuously monitors key suppliers and customers' cybersecurity scores. 28 The Company’s protective technologies include firewall and email protection against malware and phishing campaigns, and information system access management solutions such as multifactor authentication (MFA).
Regular communications remind all employees of how to be vigilant against cyberattacks. We have also recently implemented a third-party cybersecurity risk management program that continuously monitors key suppliers and customers' cybersecurity scores. The Company’s protective technologies include firewall and email protection against malware and phishing campaigns, and information system access management solutions such as multifactor authentication (MFA).
With the increasing sophistication of cyber-criminals and constantly evolving threat vectors, the Company continues to identify cybersecurity as a top risk, prompting numerous actions and measures across the Company that endeavor to mitigate and, where possible, minimize such risks. The Company increasingly leverages and relies upon digital technologies and services to conduct our business and support our customers.
With the increasing sophistication of cyber-criminals and constantly evolving threat vectors, the Company continues to identify cybersecurity as a top risk, prompting numerous actions and measures across the Company that endeavor to mitigate and, where possible, minimize such risks. 25 The Company increasingly leverages and relies upon digital technologies and services to conduct our business and support our customers.
Despite the systems and processes we have in place to monitor, detect, mitigate and remediate potential vulnerabilities, in the past, we have experienced cyberattacks, and attempted breaches, including phishing emails and other targeted attacks, and there can be no guarantees that such attacks will not occur in the future.
Despite the systems and processes we have in place to monitor, detect, mitigate and remediate potential vulnerabilities, in the past, we have experienced cyberattacks, and attempted breaches, including phishing emails and other targeted attacks, and there can be no guarantees that such attacks will not occur in the future. 26
Our security program leverages Company and third-party security professionals and services to achieve an appropriate level of security and resilience that is reviewed periodically by an IT steering committee that includes senior officers such as the CEO, CFO, Chief Legal Officer, CIO, CISO, Chief Operating Officer and Chief Technology Officer, and the efficacy of these programs is also reviewed quarterly with the Audit Committee of the Company’s Board of Directors.
Our security program leverages Company and third-party security professionals and services to achieve an appropriate level of security and resilience that is reviewed periodically by an IT steering committee that includes senior officers such as the CEO, CFO, Chief Legal Officer, CD&IO, CISO, Chief Operating Officer and Chief Technology Officer, and the efficacy of these programs is also reviewed quarterly with the Audit Committee of the Company’s Board of Directors.
This statement does not guarantee that future incidents or threats will not have a material impact or that we are not currently the subject of an undetected incident or threat that may have such an impact.
This statement does not guarantee that f uture incidents or threats will not have a material impact or that we are not currently the subject of an undetected incident or threat that may have such an impact.
The CISO reports to the Chief Information Officer (CIO), provides periodic reports to the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), and reports quarterly to the Audit Committee of the Board of Directors, which oversees the Company’s cybersecurity risk profile, including risks from cybersecurity threats, and mitigation activities.
The CISO reports to the Chief Digital and Information Officer (CD&IO), provides periodic reports to the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), and reports quarterly to the Audit Committee of the Board of Directors, which oversees the Company’s cybersecurity risk profile, including risks from cybersecurity threats, and mitigation activities.
Results of the annual enterprise risk assessment are presented to and discussed with the Audit Committee at least annually. One of the key risks evaluated annually is cybersecurity.
As a result of the annual risk assessment, the enterprise’s top risks are identified, with action plans developed to address each risk. Results of the annual enterprise risk assessment are presented to and discussed with the Audit Committee at least annually. One of the key risks evaluated annually is cybersecurity.
A universe of key risks is updated annually, with key risks rated by and discussed with corporate and site-level executives, as well as the Audit Committee, which oversees the Company's ERM process. As a result of the annual risk assessment, the enterprise’s top risks are identified, with action plans developed to address each risk.
The Company has an Enterprise Risk Management (ERM) process, with an annual risk assessment performed. A universe of key risks is updated annually, with key risks rated by and discussed with corporate and site-level executives, as well as the Audit Committee, which oversees the Company's ERM process.
In addition, he was responsible for cybersecurity in previous roles prior to joining the Company, including during his time at Rogers Corporation, a global high tech manufacturing company, as well as other global manufacturing companies. The Company has an Enterprise Risk Management (ERM) process, with an annual risk assessment performed.
The Company’s CD&IO has been and continues to be responsible for Global IT, including overseeing cybersecurity and its digital strategy. In addition, he was responsible for cybersecurity in previous roles prior to joining the Company, including during his time at Rogers Corporation, a global high tech manufacturing company, as well as other global manufacturing companies.
Removed
The Company’s CISO has over 35 years of security and cybersecurity experience between the military and corporate sectors. Prior to joining Benchmark, he oversaw cybersecurity for Masco Corporation, a Fortune 500 company, and La-Z-Boy Incorporated, both of which are global manufacturing organizations with similar complexities as the Company.
Added
The Company’s CISO has over 25 years of experience in cybersecurity, IT operations and infrastructure. Prior to joining Benchmark, she served as the VP of IT and Cybersecurity at Footprint, where she was accountable to the CEO, CFO, and board of directors.
Removed
The CISO also served as a member of the Department of Defense as a civilian in charge of cybersecurity for an Army acquisition command, overseeing the cybersecurity for approximately 320 programs of record. The Company’s CIO has been and continues to be responsible for Global IT, including overseeing cybersecurity and its digital strategy.
Added
There, she established an enterprise security framework aligned to NIST CSF and NIST SP 800-171, remediated key risks in partnership with Deloitte and PwC, and helped the organization prepare for initial public offering readiness.
Removed
We have also recently implemented a third-party cybersecurity risk management program that continuously monitors cybersecurity scores of key suppliers and customers.
Added
Prior to that, she held CISO and senior IT leadership roles at TPI Composites, Charles Schwab, and Honeywell, where she established cybersecurity frameworks aligned to the National Institute of Standards and Technology (NIST), led global incident response programs, and directed large-scale IT transformations across complex environments.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeA summary of the approximate square footage of each of our principal manufacturing facilities by country follows: Square (in thousands) Footage Americas: United States: Alabama 200 Arizona 234 California 310 Minnesota 497 New Hampshire 161 Texas 45 Mexico 813 Asia: China 326 Malaysia 436 Thailand 661 Europe: Netherlands 170 Romania 222 Total square footage 4,075 Our principal manufacturing facilities consist of 1.8 million square feet in facilities that we own, with the remaining 2.3 million square feet in leased facilities the terms of which expire between 2025 and 2036.
Biggest changeA summary of the approximate square footage of each of our principal manufacturing facilities by country follows: Square (in thousands) Footage Americas: United States: Alabama 200 Arizona 234 California 142 Minnesota 497 New Hampshire 161 Texas 45 Mexico 517 Asia: China 326 Malaysia 436 Thailand 661 Europe: Netherlands 168 Romania 222 Total square footage 3,609 Our principal manufacturing facilities consist of 1.8 million square feet in facilities that we own, with the remaining 1.8 million square feet in leased facilities the terms of which expire between 2025 and 2036.
We currently lease our corporate headquarters in Tempe, Arizona. This lease consists of approximately 64,000 square feet. We lease other facilities with a total of 69,600 square feet dedicated to engineering, sales and procurement services. We believe our facilities are suitable for their intended uses and are sufficient to meet our expected needs for the foreseeable future. 29
We currently lease our corporate headquarters in Tempe, Arizona. This lease consists of approximately 64,000 square feet. We lease other facilities with a total of 23,700 square feet dedicated to engineering, sales and procurement services. We believe our facilities are suitable for their intended uses and are sufficient to meet our expected needs for the foreseeable future.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position or results of operations. Item 4. Mine Safe ty Disclosures Not applicable. 30 PART II
Biggest changeIn the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position or results of operations. Item 4. Mine Safe ty Disclosures Not applicable. 27 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+1 added−2 removed2 unchanged
Biggest changeAs of December 31, 2024, the Company had $149.5 million remaining under the share repurchase authorization. 31 Performance Graph The following graph compares the cumulative total shareholder return on our common shares for the five‑year period commencing December 31, 2019 and ending December 31, 2024, with the cumulative total return of the Standard & Poor’s 500 Stock Index (which does not include Benchmark), and the Peer Group Index, which is composed of Celestica Inc., Flex Ltd., Jabil Inc., Kimball Electronics Inc., Plexus Corp and Sanmina Corporation.
Biggest changeAs of December 31, 2025, the Company had $122.7 million remaining under the share repurchase authorization. 28 Performance Graph The following graph compares the cumulative total shareholder return on our common shares for the five‑year period commencing December 31, 2020 and ending December 31, 2025, with the cumulative total return of the Standard & Poor’s 600 Stock Index (S&P 600) and the Nasdaq U.S.
Issuer Purchases of Equity Securities The following table provides information about the Company’s repurchase activity during the quarter ended December 31, 2024 related to its equity securities that are registered pursuant to Section 12 of the Exchange Act: (d) (c) Maximum Total Number (or Number of Approximate Shares (or Units) Dollar Value) of (a) Purchased as Shares (or Units) Total (b) Part of Publicly that May Yet Be Number of Average Price Announced Purchased Under Shares (or Units) Paid per Share Plans or the Plans or (amounts in millions, except per share data) Purchased (or Unit) Programs Programs (1) October 1 to 31, 2024 — $ — — $ 149.5 November 1 to 30, 2024 — — — 149.5 December 1 to 31, 2024 — — — 149.5 Total — — — 149.5 (1) On February 19, 2020, the Board of Directors approved a share repurchase authorization granting the Company authority to repurchase up to $150 million in common stock.
Issuer Purchases of Equity Securities The following table provides information about the Company’s repurchase activity during the quarter ended December 31, 2025 related to its equity securities that are registered pursuant to Section 12 of the Exchange Act: (d) (c) Maximum Total Number (or Number of Approximate Shares (or Units) Dollar Value) of (a) Purchased as Shares (or Units) Total (b) Part of Publicly that May Yet Be Number of Average Price Announced Purchased Under Shares (or Units) Paid per Share Plans or the Plans or (amounts in millions, except share and per share data) Purchased (or Unit) Programs Programs (1) October 1 to 31, 2025 — $ — — $ 123.5 November 1 to 30, 2025 19,481 43.88 19,481 122.7 December 1 to 31, 2025 — — — 122.7 Total 19,481 43.88 19,481 122.7 (1) On February 19, 2020, the Board of Directors approved an expanded share repurchase authorization granting the Company authority to repurchase up to $150 million in common stock.
However, the Company’s future dividend policy is subject to its compliance with applicable law, and depending on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in our debt agreements, and other factors that the Board of Directors may deem relevant.
The Board of Directors currently intends to continue paying quarterly dividends. However, the Company’s future dividend policy is subject to its compliance with applicable law, and depending on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in our debt agreements, and other factors that the Board of Directors may deem relevant.
Item 5. Market for Registrant’s Common Equity, Related S tockholder Matters and Issuer Purchases of Equity Securities Our common shares are listed on the New York Stock Exchange under the symbol “BHE.” The last reported sale price of our common shares on February 21, 2025, as reported by the New York Stock Exchange, was $41.13.
Item 5. Market for Registrant’s Common Equity, Related S tockholder Matters and Issuer Purchases of Equity Securities Our common shares are listed on the New York Stock Exchange under the symbol “BHE.” The last reported sale price of our common shares on February 19, 2026, as reported by the New York Stock Exchange, was $57.33.
The graph assumes that $100 was invested on December 31, 2019 in our common shares and in each of the two indices, and that dividends, if any, were reinvested.
Benchmark Electronic Components Index (Nasdaq Electronic Components). The graph assumes that $100 was invested on December 31, 2020 in our common shares and in each of the two indices, and that dividends, if any, were reinvested.
There were approximately 500 record holders of our common shares as of February 21, 2025. Because many of our common shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.
There were approximately 500 record holders of our common shares as of February 19, 2026. Because many of our common shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders. Dividends During 2025, cash dividends paid totaled $24.4 million.
During 2024, the Company repurchased a total of 0.1 million shares for an aggregate of $5.1 million at an average price of $40.27 per share.
During 2025, the Company repurchased a total of 0.7 million shares for an aggregate of $26.8 million at an average price of $38.22 per share.
Removed
Dividends In the third quarter of 2024, we increased the quarterly dividend from $0.165 to $0.17. During 2024, cash dividends paid totaled $23.9 million. The Board of Directors currently intends to continue paying quarterly dividends.
Added
December 31, 2020 2021 2022 2023 2024 2025 Benchmark Electronics, Inc. $ 100.00 $ 102.68 $ 103.86 $ 110.39 $ 184.47 $ 176.76 Nasdaq Electronic Components 100.00 126.69 126.12 120.18 150.80 185.16 S&P 600 100.00 125.27 103.45 117.81 125.85 131.18 Item 6. [Reserved] 29
Removed
December 31, 2019 2020 2021 2022 2023 2024 Benchmark Electronics, Inc. $ 100.00 $ 80.94 $ 83.10 $ 84.06 $ 89.35 $ 149.30 Peer Group 100.00 111.91 147.89 161.06 246.91 375.27 S&P 500 100.00 118.40 152.39 124.79 157.59 197.02 Item 6. [Reserved] 32

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

50 edited+18 added−27 removed40 unchanged
Biggest changeAerospace 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. 34 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.
Biggest changeAerospace 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.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. 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.
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.
Actual results could differ from these estimates under different assumptions or conditions. 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.
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.
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.
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.
Based on our qualitative assessments of goodwill as of December 31, 2024 and 2023, 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.
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.
A summary of our operating lease obligations as of December 31, 2024 can be found in Note 6 to the consolidated financial statements in Part II, Item 8 of this Report.
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.
Working capital was $0.9 billion as of December 31, 2024. 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.
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.
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.
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.
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.
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.
As of December 31, 2024 and 2023, 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.
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.
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, 2024 2023 Sales 100.0 % 100.0 % Cost of sales 89.8 90.5 Gross profit 10.2 9.5 Selling, general and administrative expenses 5.6 5.1 Amortization of intangible assets 0.2 0.2 Restructuring charges and other costs 0.3 0.3 Income from operations 4.1 3.9 Other expense, net (0.9 ) (1.0 ) Income before income taxes 3.2 2.9 Income tax expense 0.8 0.6 Net income 2.4 % 2.3 % 2024 Compared With 2023 Sales Sales decreased 6% in 2024.
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.
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.
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.
The decrease of $1.0 million in 2024 is primarily the result of items discussed above. 36 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).
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).
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. The Board of Directors currently intends to continue paying quarterly dividends.
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.
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. 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.
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 2024, the Company repurchased 0.1 million shares for an aggregate of $5.1 million, at an average price of $40.27 per share.
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.
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 $26.9 million in 2024 from $31.9 million in 2023 primarily due to decreased borrowings partially offset by a higher interest rate environment.
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.
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.
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.
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.
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.
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.
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.
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.
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.
As of December 31, 2024, the Company had $149.5 million remaining under share its repurchase authorization. 38 Dividends During 2024, 2023 and 2022, cash dividends paid totaled $23.9 million, $23.5 million and $23.2 million, respectively.
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.
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. 2024 OVERVIEW Sales for 2024 were $2.7 billion, a 6% decrease from sales of $2.8 billion in 2023.
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.
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. 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.
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.
The purchases of property, plant and equipment were primarily for machinery and equipment in the Americas and Asia. 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.
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.
During 2024, sales to customers in our various industry sectors fluctuated from 2023 as follows: • Semi-Cap increased by 12% • Industrial decreased by 4% • Medical decreased by 19% • A&D increased by 20% • AC&C decreased by 30% 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.
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.
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.
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.
There can be no assurance, however, that we would be successful in raising additional debt or equity on acceptable terms. 2024 Cash Flows 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.
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.
See Note 8 to the consolidated financial statements in Part II, Item 8 of this Report. Net Income 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.
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 percentages of our sales by market sector were as follows: Year Ended December 31, 2024 2023 Semi-Cap 27 % 23 % Industrial 22 21 Medical 17 20 A&D 16 13 AC&C 18 23 Total net sales 100 % 100 % 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.
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.
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.
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.
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 estimate our income tax provision in each of the jurisdictions where we operate, including estimating exposures related to uncertain tax positions.
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 from operations by reportable segment was as follows: Year Ended December 31, (in thousands) 2024 2023 Income from operations: Americas $ 40,215 $ 63,484 Asia 140,308 124,279 Europe 26,268 17,380 Corporate and intersegment eliminations (97,380 ) (95,479 ) Total income from operations $ 109,411 $ 109,664 Americas. 2024 operating income decreased 37% to $40.2 million from $63.5 million in 2023.
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.
A summary of our long-term debt obligations as of December 31, 2024 can be found in Note 5 to the consolidated financial statements in Part II, Item 8 of this Report. U.S. federal income tax on deemed mandatory repatriation is payable over four years pursuant to the U.S. Tax Reform.
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
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.
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.
Sales by geographical segment were as follows: Year Ended December 31, (in thousands) 2024 2023 Sales: Americas $ 1,330,361 $ 1,611,783 Asia 1,091,149 1,055,938 Europe 339,337 299,835 Elimination of intersegment sales (104,742 ) (128,580 ) Total sales $ 2,656,105 $ 2,838,976 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.
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.
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.
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 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.
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.
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.
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.
Income Tax Expense 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%.
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 decrease was primarily due to certain assets becoming fully amortized in 2023. Restructuring Charges and Other Costs During 2024, we recognized $6.3 million of restructuring charges primarily due to capacity and workforce reductions at our sites in the Americas.
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.
The asset impairment charges are included in restructuring charges and other costs in the consolidated statement of income. 33 See Note 16 to the consolidated financial statements in Part II, Item 8 of this Report for additional information on our restructuring charges.
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.
Selling, General and Administrative (SG&A) Expenses 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. Amortization of Intangible Assets Amortization of intangible assets was $4.8 million in 2024 and $6.0 million in 2023.
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.
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.
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.
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. We have undertaken initiatives to restructure our business operations with the intention of improving utilization and reducing costs.
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.
Interest Income Interest income increased to $10.2 million in 2024 from $6.3 million in 2023 primarily due to higher interest rates. Other (Expense) Income, Net 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.
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.
See Note 8 to the consolidated financial statements in Part II, Item 8 of this Report. 41
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.
Gross Profit 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.
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.
During 2024, we recognized $6.3 million of restructuring charges primarily related to capacity and workforce reductions at our sites in the Americas. 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.
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.
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.
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.
Removed
Inflation, interest rates, disruption in the global economy and financial markets, geopolitical events, tariffs and trade restrictions continue to create uncertainty.
Added
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.
Removed
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. 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.
Added
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.
Removed
During 2024 and 2023, 62% and 58%, respectively, of our sales were from international operations.
Added
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.
Removed
Income from Operations 2024 income from operations declined slightly to $109.4 million from $109.7 million in 2023.
Added
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.
Removed
The decrease was primarily due to lower revenue. 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. 35 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.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
Credit Agreement 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).
Added
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.
Removed
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. 37 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).
Added
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.
Removed
The Amendment increased the revolving credit facility commitments from $250 million to $450 million.
Added
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.
Removed
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%).
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
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%).
Added
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed6 unchanged
Biggest changeAs of December 31, 2024, we had $123.0 million outstanding on the floating rate term loan facility, and we have an interest rate swap agreement with a notional amount of $123.0 million. Under this swap agreement, we receive variable rate interest rate payments and pay fixed rate interest payments.
Biggest changeAs of December 31, 2025, we had $148.1 million outstanding on the floating rate term loan facility, and we have an interest rate swap agreement with a notional amount of $148.1 million. Under this swap agreement, we receive variable rate interest rate payments and pay fixed rate interest payments.
We do not use derivative financial instruments for speculative purposes. Certain forward currency exchange contracts in place as of December 31, 2024 have not been designated as accounting hedges and, therefore, changes in fair value are recorded within our consolidated statement of income in Part II, Item 8 of this Report.
We do not use derivative financial instruments for speculative purposes. Certain forward currency exchange contracts in place as of December 31, 2025 have not been designated as accounting hedges and, therefore, changes in fair value are recorded within our consolidated statement of income in Part II, Item 8 of this Report.
The effect of this swap is to convert our floating rate interest expense to fixed interest rate expense. The interest rate swap is designated as a cash flow hedge. For additional information, see Note 12 to the consolidated financial statements in Part II, Item 8 of this Report. 42
The effect of this swap is to convert our floating rate interest expense to fixed interest rate expense. The interest rate swap is designated as a cash flow hedge. For additional information, see Note 12 to the consolidated financial statements in Part II, Item 8 of this Report. 38

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