Benchmark Electronics, Inc.
"Our teams continued to deliver solid results during the quarter, while running at record levels. Our focus will be on working capital metric improvements during upcoming quarters in addition to our ongoing focus on volume ramps of programs," stated Benchmark's President and CEO Cary T. Fu.
Third Quarter 2006 Financial Highlights
-- Operating margin for the third quarter was 4.5% on a GAAP basis and was
4.6%, excluding restructuring charges and the impact of stock-based
compensation expense.
-- Cash flows used in operating activities for the third quarter were
$12 million.
-- Cash and short-term investments balance at September 30, 2006 of
$265 million.
-- No debt outstanding.
-- Accounts receivable balance at September 30, 2006 of $442 million;
calculated days sales outstanding were 52 days.
-- Inventory of $532 million at September 30, 2006; inventory turns were
5.4 times.
Fourth Quarter 2006 Guidance
Revenues for the fourth quarter of 2006 are expected to be between $710 million and $740 million. Diluted earnings per share for the fourth quarter, excluding restructuring charges and the impact of stock-based compensation expense, are expected to be between $0.41 and $0.44.
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 www.bench.com.
Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
Three Months Nine Months
Ended Ended
September 30, September 30,
2006 2005 2006 2005
Net sales $769,549 $561,452 $2,169,964 $1,631,851
Cost of sales 717,290 521,148 2,020,039 1,515,316
Gross profit 52,259 40,304 149,925 116,535
Selling, general and
administrative expenses 17,208 15,617 51,987 46,307
Restructuring charges 448 - 4,478 -
Income from operations 34,603 24,687 93,460 70,228
Other income (expense):
Interest expense (85) (86) (268) (238)
Other 1,838 2,062 5,508 4,688
Total other income, net 1,753 1,976 5,240 4,450
Income before income taxes 36,356 26,663 98,700 74,678
Income tax expense 7,020 6,356 15,318 18,744
Net income $29,336 $20,307 $83,382 $55,934
Denominator for basic
earnings per share --
weighted average number of
common shares outstanding
during the period 64,585 62,736 64,172 62,580
Incremental common shares
attributable to
exercise of outstanding
dilutive options 907 1,419 1,031 1,546
Denominator for diluted
earnings per share 65,492 64,155 65,203 64,126
Earnings per share:
Basic $ 0.45 $ 0.32 $ 1.30 $ 0.89
Diluted $ 0.45 $ 0.32 $ 1.28 $ 0.87
Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
September 30, 2006
(Amounts in Thousands)
(UNAUDITED)
Assets
Current assets:
Cash and cash-equivalents $114,040
Short-term investments 150,910
Accounts receivable, net 441,525
Inventories, net 532,110
Other current assets 57,019
Total current assets 1,295,604
Property, plant and equipment, net 103,503
Other assets, net 7,759
Goodwill, net 112,995
Total assets $1,519,861
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $480,805
Other current liabilities 69,355
Total current liabilities 550,160
Other long-term liabilities 15,772
Shareholders' equity 953,929
Total liabilities and
shareholders' equity $1,519,861
Benchmark Electronics, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Results
Three and Nine Months Ended September 30, 2006
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
Three Months Nine Months
Ended Ended
September 30, September 30,
2006 2006
Income from operations (GAAP) $34,603 $93,460
Stock-based compensation 621 2,283
Restructuring charges 448 4,478
Non-GAAP income from operations $35,672 $100,221
Net income (GAAP) $29,336 $83,382
Stock-based compensation, net of tax 460 1,667
Restructuring charges, net of tax 259 3,853
UK investment tax benefit - (4,760)
Non-GAAP net income $30,055 $84,142
Earnings per share: (GAAP)
Basic $0.45 $1.30
Diluted $0.45 $1.28
Earnings per share: (Non-GAAP)
Basic $0.47 $1.31
Diluted $0.46 $1.29
Weighted average shares used in
calculating earnings per share:
Basic 64,585 64,172
Diluted 65,492 65,203
First Call Analyst:
FCMN Contact: james.walker@bench.com
SOURCE: Benchmark Electronics, Inc.
CONTACT: Gayla J. Delly, Chief Financial Officer, +1-979-849-6550
Web site: http://www.bench.com/
