Company: BHE
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000950170-25-025644
Chunk: 36

Company: BENCHMARK ELECTRONICS INC
Filing Date: 2025-02-24
Form: 10-K
Item: Item 1A
Chunk 36
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 for inventory. If any of our significant customers become unable or unwilling to purchase such inventory, our business may be materially harmed.

Our international operations are subject to certain risks.

During 2024, 2023 and 2022, 62%, 58% and 61% respectively, of our sales were from our international operations. These 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;

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•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.

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. (including as a result of the change in presidential administration) or other governments could negatively affect our operating results due to trade wars, changes in duties, tariffs or taxes,