Benchmark Electronics, Inc.
Our first quarter was in line with our revised expectations. This quarter was impacted by the general slowdown in the technology marketplaces, which affected not only existing customer programs but also the pace of the new program rampings. We have taken aggressive measures to adjust our cost structure to the current market conditions. Based on current demand forecasts from our customers for the second quarter, we anticipate revenue to be approximately 10 - 15% below the first quarter and cash earnings per share in the range of 20 to 25 cents, excluding any restructuring charges.
Donald E. Nigbor, president and CEO of Benchmark Electronics, Inc. commented: "Benchmark has undertaken the very painful steps of reducing our workforce in line with the revenue forecasts from our customers. We value each of our team members greatly and take these steps only when required by the business environment. Although this downturn has been rapid and deep, we remain confident of Benchmark's future and the future of the EMS industry."
First Quarter Financial Trend Highlights -- Gross margin was 7.5%, which is consistent with the fourth quarter 2000. -- Selling general and administrative expenses remained at 3.3% for the first quarter 2001. -- Inventories decreased by $36 million in the quarter to $310 million as compared to $346 million for the fourth quarter 2000. Inventory turns remained at 5.2 for the quarter. -- Accounts receivable decreased by $42 million in the quarter to $235 million as compared to $278 million for the fourth quarter 2000. Days sales outstanding improved to 49.0 for the quarter.
This news release contains forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include component availability and cost, risk of component price fluctuations, reliance on major customers, delays, reductions and cancellations of orders forecasted by customers, fluctuations in quarterly operating results, changes in technology, competition, the ability to manage through an industry downturn, the ability to manage integration of acquired operations, risks associated with international sales and operations, interest rate risk, environmental regulations, litigation, market risk, segment risk, the ability to retain key personnel, our level of indebtedness, a deterioration in the condition of the capital markets and the ability to maintain our technological and manufacturing process expertise. For a further list and description of risks and uncertainties, see the reports filed by Benchmark with the Securities and Exchange Commission, specifically forms 8-K, 10-Q, 10-K and S-3. Benchmark disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Benchmark Electronics, Inc. is in the business of manufacturing electronics and provides its services to original equipment manufacturers of telecommunication equipment, computers and related products for business enterprises, video/audio/entertainment products, industrial control equipment, testing and instrumentation products, personal computers and medical devices. Benchmark's global operations include 16 facilities in six countries. Benchmark's Common Stock trades on the New York Stock Exchange under the symbol BHE.
A conference call hosted by Benchmark management will be held today at 9:00 am CDT to discuss the financial results of the Company and its future outlook. This call will be broadcast via the Internet and may be accessed by logging on to our website at http://www.bench.com/. Additional information in the form of a slide presentation that summarizes and discusses the quarterly results may also be found on the website.
Benchmark Electronics, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Amounts in Thousands, Except Per Share Data) (UNAUDITED) Three Months Ended March 31, 2001 2000 Sales $431,905 349,155 Cost of sales 399,742 325,509 Gross profit 32,163 23,646 Selling, general and administrative expenses 14,160 12,681 Restructuring charges (a) 1,266 --- Amortization of goodwill 3,222 3,220 Income from operations 13,515 7,745 Other income (expense): Interest expense (5,749) (5,563) Other (463) 828 Total other expense, net (6,212) (4,735) Income before income taxes 7,303 3,010 Income tax expense 2,191 1,033 Net income $5,112 1,977 Earnings per share: Basic $0.26 0.12 Diluted 0.25 0.12 Cash 0.36 0.24 Weighted average number of shares outstanding: Basic 19,597 16,248 Diluted 20,324 17,173 (a) During the quarter ended March 31, 2001, we recorded restructuring charges of $1.27 million ($0.89 million after-tax) related to reductions in force. Earnings per share before restructuring charges: Basic $0.31 0.12 Diluted 0.30 0.12 Cash 0.41 0.24 Benchmark Electronics, Inc. and Subsidiaries Condensed Consolidated Balance Sheet March 31, 2001 (Amounts in Thousands, Except Per Share Data) (UNAUDITED) Assets Current assets: Cash $22,646 Accounts receivable, net 235,280 Inventories, net 309,652 Other current assets 18,032 Total current assets 585,610 Property, plant and equipment, net 129,053 Other assets, net 18,069 Goodwill, net 162,214 Total assets $894,946 Liabilities and Shareholders' Equity Current liabilities: Current installments of other long-term debt $21,134 Accounts payable 204,987 Other current liabilities 28,890 Total current liabilities 255,011 Revolving line of credit 73,000 Convertible subordinated notes 80,200 Other long-term debt, excluding current installments 61,716 Other long-term liabilities 14,963 Shareholders' equity 410,056 Total liabilities and shareholders' equity $894,946
SOURCE: Benchmark Electronics, Inc.
Contact: Cary T. Fu, Executive Vice President, or Gayla J. Delly, Vice
President Finance, both of Benchmark Electronics, Inc., 979-849-6550