Benchmark Electronics, Inc.,
Sales revenue for the year ended December 31, 2004 was $2.0 billion, an 8.8% increase from $1.8 billion of revenue in the previous year. Net income for the year ended December 31, 2004 was $71.0 million, compared to $55.4 million for the prior year. Diluted earnings per share was $1.67 for the year ended December 31, 2004, compared to $1.39 per share in the prior year. For the year ended December 31, 2003, excluding two special items, an $8.1 million ($5.4 million net of tax) contract settlement gain and $2.8 million ($1.9 million net of tax) in restructuring charges, the Company had net income before special items of $51.9 million, or $1.31 per diluted share.
"2004 was another good year for Benchmark," commented Cary T. Fu, President and CEO of Benchmark Electronics, Inc. "We again exceeded every major goal that we set last February. We enhanced our customer base, reduced customer concentration, expanded our low cost manufacturing capacities, realigned our resources, increased our technical capabilities and delivered solid financial performance. Additionally, our 2004 new program bookings provide good momentum for a strong 2005."
Fourth Quarter 2004 Financial Highlights
* Operating margin for the fourth quarter was 4.6%.
* Return on invested capital of 14.0%.
* Cash balance at December 31, 2004 of $367 million.
* No debt outstanding as of December 31, 2004.
* Accounts receivable were $251 million at December 31, 2004; calculated
days sales outstanding were 43 days.
* Inventories decreased by $33 million to $257 million; inventory turns
were 7.5 times.
* During the fourth quarter our tax rate was reduced by approximately 2%
on a full year basis. This favorable result was primarily related to
the dissolution of an inactive foreign owned subsidiary.
First Quarter and Full Year 2005 Guidance
* Revenue in the first quarter of 2005 is expected to be between $510
million and $530 million.
* Earnings per share for the first quarter of 2005 are expected to be
$0.40 to $0.44 per diluted share.
* For the 2005 fiscal year the Company anticipates revenue and earnings
growth in the range of 10 - 15%.
Non-GAAP Financial Measures
This press release includes financial measures for earnings and earnings per share for 2003 that exclude certain items and therefore are not in accordance with generally accepted accounting principles (GAAP). A detailed reconciliation between the GAAP results and results excluding special items (non-GAAP) is included at the end of this press release. By disclosing this non-GAAP information, management intends to provide investors with additional information to further analyze the company's performance and underlying trends. Benchmark's results for the fourth quarter of 2003 include the impact of closing our Scotland facility during the fourth quarter of 2003. In addition, our results for the year ended December 31, 2003 also include the impact of a non-cash gain related to the settlement and release of various claims arising out of customer manufacturing agreements. We are providing information in this earnings release which adds back the one-time costs associated with the closing of our Scotland facility to net income and subtracts the one-time non-cash gain from net income. This allows investors to more readily compare the 2003 fourth-quarter and year-end results with the earnings in accordance with generally accepted accounting principles (GAAP) reported in 2004.
Non-GAAP information is not necessarily comparable to other companies. Non-GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as measures of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made.
Forward-Looking Statements
This news release contains certain forward-looking statements within the scope of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words "expect," "estimate," "anticipate," "predict," and similar expressions, and the negatives of such expressions, are intended to identify forward-looking statements. Although the Company believes that these statements are based upon reasonable assumptions, such statements involve risks, uncertainties and assumptions, including but not limited to industry and economic conditions, customer actions and the other factors discussed in Benchmark's Form 10-K for the year ended December 31, 2003 and its other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.
Benchmark Electronics, Inc. is in the business of manufacturing electronics and provides its services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment, testing and instrumentation products, and telecommunication equipment. Benchmark's global operations include facilities in eight 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 10:00 am CST 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/.
Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Net sales $524,232 $487,051 $2,001,340 $1,839,821
Cost of sales 484,489 446,277 1,847,573 1,689,548
Gross profit 39,743 40,774 153,767 150,273
Selling, general and
administrative expenses 15,504 15,732 61,108 64,976
Contract settlement - - - (8,108)
Restructuring charge - 2,815 - 2,815
Operating income 24,239 22,227 92,659 90,590
Other income (expense):
Interest expense (154) (819) (1,705) (7,714)
Other 596 (1,501) 3,199 134
Total other income
(expense), net 442 (2,320) 1,494 (7,580)
Income before
income taxes 24,681 19,907 94,153 83,010
Income tax expense 4,474 6,498 23,162 27,574
Net income $20,207 $13,409 $70,991 $55,436
Numerator for basic
earnings per share -
net income $20,207 $13,409 $70,991 $55,436
Interest expense on
6% convertible debt,
net of tax - - - 2,180
Numerator for diluted
earnings per share $20,207 $13,409 $70,991 $57,616
Denominator for basic
earnings per share -
weighted average number
of common shares
outstanding during
the period 41,407 40,649 41,134 38,124
Incremental common
shares attributable
to exercise of
outstanding dilutive
options 1,213 1,529 1,331 1,291
Incremental common
shares attributable
to conversion of 6%
convertible debt - - - 2,017
Denominator for diluted
earnings per share 42,620 42,178 42,465 41,432
Earnings per share:
Basic $0.49 $0.33 $1.73 $1.45
Diluted $0.47 $0.32 $1.67 $1.39
Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
December 31, 2004
(Amounts in Thousands)
(UNAUDITED)
Assets
Current assets:
Cash $ 367,368
Accounts receivable, net 251,305
Inventories, net 256,876
Other current assets 22,789
Total current assets 898,338
Property, plant and equipment, net 71,569
Other assets, net 6,010
Goodwill, net 112,853
Total assets $ 1,088,770
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 257,054
Other current liabilities 74,577
Total current liabilities 331,631
Other long-term liabilities 5,622
Shareholders' equity 751,517
Total liabilities and
shareholders' equity $ 1,088,770
Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statement of Income - Excluding Special Items
Three Months Ended December 31, 2003
(Amounts in Thousands)
(UNAUDITED)
As Before
Reported Special Items Special Items
Net sales $487,051 487,051
Cost of sales 446,277 446,277
Gross profit 40,774 40,774
Selling, general and
administrative expenses 15,732 15,732
Restructuring charge 2,815 (2,815) -
Operating income 22,227 2,815 25,042
Other income (expense):
Interest expense (819) (819)
Other (1,501) (1,501)
Total other expense,
net (2,320) (2,320)
Income before
income taxes 19,907 2,815 22,722
Income tax expense 6,498 919 7,417
Net income $13,409 1,896 15,305
Earnings per share:
Basic $0.38
Diluted $0.36
Weighted average number of
shares outstanding:
Basic 40,649
Diluted 42,178
Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statement of Income - Excluding Special Items
Year Ended December 31, 2003
(Amounts in Thousands)
(UNAUDITED)
As Before
Reported Special Items Special Items
Net sales $1,839,821 1,839,821
Cost of sales 1,689,548 1,689,548
Gross profit 150,273 150,273
Selling, general and
administrative expenses 64,976 64,976
Contract settlement (8,108) 8,108 -
Restructuring charge 2,815 (2,815) -
Operating income 90,590 (5,293) 85,297
Other income (expense):
Interest expense (7,714) (7,714)
Other 134 134
Total other expense, net (7,580) (7,580)
Income before
income taxes 83,010 (5,293) 77,717
Income tax expense 27,574 (1,758) 25,816
Net income $55,436 (3,535) 51,901
Numerator for
basic earnings
per share -
net income $51,901
Interest expense
on 6% convertible
debt, net of tax 2,180
Numerator for diluted
earnings per share $54,081
Denominator for basic
earnings per share -
weighted average number of
common shares outstanding
during the period 38,124
Incremental common shares
attributable to exercise of
outstanding dilutive
options 1,291
Incremental common shares
attributable to conversion
of 6% convertible debt 2,017
Denominator for diluted
earnings per share 41,432
Earnings per share:
Basic $1.36
Diluted $1.31
SOURCE: Benchmark Electronics, Inc.
CONTACT: Gayla J. Delly, Chief Financial Officer, +1-979-849-6550 for
Benchmark Electronics, Inc.
Web site: http://www.bench.com/
