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.
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
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SOURCE: Benchmark Electronics, Inc.
CONTACT: Gayla J. Delly, Chief Financial Officer, +1-979-849-6550
Web site: http://www.bench.com/