Benchmark Electronics, Inc.
"We experienced a strong second quarter with solid year-to-date growth in each of the industry sectors that we serve. Our commitment and focus on improving our operational effectiveness will drive Benchmark's continued success," stated Benchmark's President and CEO Cary T. Fu.
Second Quarter 2006 Financial Highlights
* Operating margin for the second quarter was 4.4% on a GAAP basis and
was 4.7%, excluding restructuring charges and the impact of stock-based
compensation expenses.
* Cash flows provided by operating activities for the second quarter was
$1.9 million.
* Cash and short-term investments balance at June 30, 2006 of $282
million.
* No debt outstanding.
* Accounts receivable balance at June 30, 2006 of $443 million;
calculated days sales outstanding were 53 days.
* Inventory of $481 million at June 30, 2006; inventory turns were 5.8
times.
Third Quarter 2006 Guidance
Revenues for the third quarter of 2006 are expected to be between $710 million and $750 million. Diluted earnings per share for the third quarter, excluding restructuring charges and the impact of stock-based compensation expenses, are expected to be between $0.40 and $0.45.
Full Year 2006 Guidance
We are raising our full year guidance. Revenues for 2006 are now expected to be between $2.76 billion and $2.85 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 $1.61 and $1.69.
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 Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Net sales $749,171 $560,817 $1,400,415 $1,070,399
Cost of sales 696,871 522,071 1,302,749 994,168
Gross profit 52,300 38,746 97,666 76,231
Selling, general and
administrative
expenses 18,409 15,478 34,779 30,690
Restructuring charges 1,261 --- 4,030 ---
Income from
operations 32,630 23,268 58,857 45,541
Other income (expense):
Interest expense (97) (85) (183) (152)
Other 1,981 1,956 3,670 2,626
Total other income, net 1,884 1,871 3,487 2,474
Income before
income taxes 34,514 25,139 62,344 48,015
Income tax expense 6,990 6,441 8,298 12,388
Net income $27,524 $18,698 $54,046 $35,627
Denominator for basic
earnings per share -
weighted average number
of common shares
outstanding during
the period 64,320 62,560 63,963 62,500
Incremental common
shares attributable
to exercise of
outstanding dilutive
options 953 1,435 1,078 1,565
Denominator for diluted
earnings per share 65,273 63,995 65,041 64,065
Earnings per share:
Basic $0.43 $0.30 $0.84 $0.57
Diluted $0.42 $0.29 $0.83 $0.56
Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
June 30, 2006
(Amounts in Thousands)
(UNAUDITED)
Assets
Current assets:
Cash and cash-equivalents $98,911
Short-term investments 183,110
Accounts receivable, net 443,264
Inventories, net 480,662
Other current assets 43,375
Total current assets 1,249,322
Property, plant and equipment, net 102,030
Other assets, net 7,983
Goodwill, net 112,990
Total assets $1,472,325
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $468,427
Other current liabilities 68,499
Total current liabilities 536,926
Other long-term liabilities 15,116
Shareholders' equity 920,283
Total liabilities and shareholders' equity $1,472,325
Benchmark Electronics, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Results
Three and Six Months Ended June 30, 2006
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
Three Months Six Months
Ended Ended
June 30, 2006 June 30, 2006
Income from operations (GAAP) $32,630 $58,857
Stock-based compensation 1,177 1,662
Restructuring charges 1,261 4,030
Non-GAAP income from operations $35,068 $64,549
Net income (GAAP) $27,524 $54,046
Stock-based compensation, net of tax 835 1,207
Restructuring charges, net of tax 1,041 3,594
UK investment tax benefit --- (4,760)
Non-GAAP net income $29,400 $54,087
Earnings per share: (GAAP)
Basic $0.43 $0.84
Diluted $0.42 $0.83
Earnings per share: (Non-GAAP)
Basic $0.46 $0.85
Diluted $0.45 $0.83
Weighted average shares used in calculating
earnings per share:
Basic 64,320 63,963
Diluted 65,273 65,041
SOURCE: Benchmark Electronics, Inc.
CONTACT: Gayla J. Delly, Chief Financial Officer of Benchmark
Electronics, Inc., +1-979-849-6550
Web site: http://www.bench.com/
