Benchmark Electronics, Inc.
"These results reflect the overall strength of our business model. With overall improvements in the marketplace, our primary challenge is to properly manage our growth and maintain our execution levels," stated Benchmark's President and CEO Cary T. Fu.
First Quarter 2006 Financial Highlights
-- Operating margin for the first quarter was 4.0% on a GAAP basis and
was 4.5%, excluding restructuring charges and the impact of stock-
based compensation expenses.
-- Cash flows used by operating activities for the first quarter was
$42.7 million.
-- Cash and short-term investments balance at March 31, 2006 of $288
million.
-- No debt outstanding.
-- Accounts receivable balance at March 31, 2006 of $447 million;
calculated days sales outstanding were 62 days.
-- Inventory of $403 million at March 31, 2006; inventory turns were 6.0
times.
Second Quarter 2006 Guidance
Revenues for the second quarter of 2006 are expected to be between $630 million and $660 million. Diluted earnings per share for the second quarter, excluding restructuring charges and the impact of stock-based compensation expenses, are expected to be between $0.36 and $0.39 ($0.33 and $0.36 on a GAAP basis).
Full Year 2006 Guidance
We are raising our full year guidance. Revenues for 2006 are now expected to be between $2.55 billion and $2.60 billion. The corresponding diluted earnings per share for 2006, excluding restructuring charges, the impact of stock-based compensation expenses and the first quarter tax benefit, are expected to be between $1.48 and $1.53 ($1.46 and $1.51 on a GAAP basis).
Non-GAAP Financial Measures
This press release includes financial measures for earnings and earnings per share that excludes 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. Management utilizes a measure of net income and earnings per share on a non-GAAP basis that excludes certain items to better assess operating performance and to help investors compare our results with our previous guidance.
Non-GAAP information is not necessarily comparable to Non-GAAP information of 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 Benchmark 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, 2005 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 seven countries. Benchmark's Common Shares trade 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 (Central time) 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
March 31,
2006 2005
Net sales $651,244 $509,582
Cost of sales 605,878 472,097
Gross profit 45,366 37,485
Restructuring charges 2,769 -
Selling, general and administrative expenses 16,370 15,212
Income from operations 26,227 22,273
Other income (expense):
Interest expense (86) (67)
Other 1,689 670
Total other income, net 1,603 603
Income before income taxes 27,830 22,876
Income tax expense 1,308 5,947
Net income $26,522 $16,929
Denominator for basic earnings per share -
weighted average number of common shares
outstanding during the period 63,601 62,440
Incremental common shares attributable to
exercise of outstanding dilutive options 1,224 1,621
Denominator for diluted earnings per share 64,825 64,061
Earnings per share:
Basic $0.42 $0.27
Diluted $0.41 $0.26
Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
March 31, 2006
(Amounts in Thousands)
(UNAUDITED)
Assets
Current assets:
Cash and cash-equivalents $ 115,645
Short-term investments 172,135
Accounts receivable, net 446,622
Inventories, net 403,161
Other current assets 29,541
Total current assets 1,167,104
Property, plant and equipment, net 97,694
Other assets, net 6,392
Goodwill, net 112,991
Total assets $ 1,384,181
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 406,342
Other current liabilities 76,404
Total current liabilities 482,746
Other long-term liabilities 14,805
Shareholders' equity 886,630
Total liabilities and shareholders'
equity $ 1,384,181
Benchmark Electronics, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Results
Three Months Ended March 31, 2006
(Amounts in Thousands)
(UNAUDITED)
Operating income (GAAP) $ 26,227
Stock-based compensation 486
Restructuring charges 2,769
Non-GAAP operating income $ 29,482
Net income (GAAP) $ 26,522
Stock-based compensation, net of tax 372
Restructuring charges, net of tax 2,553
UK investment tax benefit (4,760)
Non-GAAP net income $ 24,687
Earnings per share: (GAAP)
Basic $ 0.42
Diluted $ 0.41
Earnings per share: (Non-GAAP)
Basic $ 0.39
Diluted $ 0.38
Weighted average shares used in calculating
earnings per share:
Basic 63,601
Diluted 64,825
SOURCE: Benchmark Electronics, Inc.
CONTACT: Gayla J. Delly, Chief Financial Officer for Benchmark
Electronics, +1-979-849-6550
Web site: http://www.bench.com/
