Company: BHE
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000950170-25-025644
Chunk: 33

Company: BENCHMARK ELECTRONICS INC
Filing Date: 2025-02-24
Form: 10-K
Item: Item 1A
Chunk 33
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 and financial stability of our customers. 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. When our customers are adversely affected by these factors, we may be similarly affected. 

15

The loss of a major customer would adversely affect us.

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. 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.

We expect to continue to depend on sales to our largest customers, and any material delay, cancellation or reduction of orders from these customers or other significant customers would have a material adverse effect on our results of operations. In addition, we generate significant accounts receivable in connection with providing services to our customers. If one or more of our customers were to become insolvent or otherwise unable to pay for the services provided by us, our operating results and financial condition would be adversely affected.

Most of our customers do not commit to long-term production schedules, which makes it difficult for us to schedule production and achieve maximum efficiency of our manufacturing capacity.

The volume and timing of sales to our customers vary due to:

•changes in demand for their products;

•their attempts to manage their inventory;

•design changes;

•changes in their manufacturing strategies; and

•acquisitions of, or consolidations among, customers.

Due in part to these factors, most of our customers do not commit to firm production schedules for more than one quarter in advance. Our inability to forecast the level of customer orders with certainty makes it difficult to schedule production and maximize utilization of manufacturing capacity and on-hand inventory components and supplies. In the past, we have been required to increase staffing and other expenses, including component parts inventory, in order to meet the anticipated demand of our customers. 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,