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NYSEBHE
Benchmark Electronics Reports Results for the Quarter and Year Ended December 31, 2006
Annual Sales Up 29% and Earnings Up 39%
PRNewswire-FirstCall
ANGLETON, Texas

Benchmark Electronics, Inc. , a leading contract manufacturing provider, announced sales of $737 million for the quarter ended December 31, 2006, compared to $625 million for the same quarter in the prior year. Fourth quarter net income was $28.3 million, or $0.43 per diluted share. In the comparable period of 2005, net income was $24.7 million, or $0.38 per diluted share. Excluding restructuring charges and the impact of stock-based compensation expense, the Company would have reported net income of $29.0 million, or $0.44 per diluted share, in the fourth quarter of 2006.

Sales for the year ended December 31, 2006 were $2.9 billion, a 29% increase from $2.3 billion in the previous year. Net income for the year ended December 31, 2006 was $111.7 million, or $1.71 per diluted share. In the prior year, net income was $80.6 million, or $1.25 per diluted share. Excluding restructuring charges, the impact of stock-based compensation expense and a tax benefit resulting from the closure of our UK facility, the Company would have reported net income of $113.1 million, or $1.74 per diluted share, in 2006.

"We are pleased with our performance in the fourth quarter. We had a solid finish to 2006 and achieved record annual sales and earnings," stated Benchmark's CEO Cary T. Fu. "Our teams have delivered strong revenue growth for the past five years."

  Fourth Quarter 2006 Financial Highlights
  -- Operating margin for the fourth quarter was 4.3% on a GAAP basis and
     was 4.5%, excluding restructuring charges and the impact of stock-based
     compensation expense.
  -- Cash flows used in operating activities for the fourth quarter were $28
     million.
  -- Cash and short-term investments balance at December 31, 2006 of $224
     million.
  -- No debt outstanding.
  -- Accounts receivable balance at December 31, 2006 of $463 million;
     calculated days sales outstanding were 57 days.
  -- Inventory of $420 million at December 31, 2006, a decrease of $112
     million compared to September 30; inventory turns were 6.5 times.
  -- Effective tax rate for the full year 2006 of 15.2% compared to 23.8% in
     2005.

  2007 Outlook

The outlook for Benchmark remains positive moving into fiscal 2007. A moderation in end market demands and growth rates is expected when compared to 2006. For 2007, including the impact of the acquisition of Pemstar, we expect top line growth of 12-15% for the year and earnings growth in the range of 15- 20%, excluding integration costs and the impact of stock-based compensation expense.

Specifically, sales for the first quarter of 2007 are expected to be between $735 million and $765 million. Diluted earnings per share for the first quarter, excluding integration costs and the impact of stock-based compensation expense, are expected to be between $0.37 and $0.42.

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. In particular, statements, express or implied, concerning future operating results or the ability to generate sales, income or cash flow are 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.

Additional Information

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. With the acquisition of Pemstar, Benchmark's global operations now include 24 facilities in nine 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            Year Ended
                             December 31,              December 31,
                          2006         2005         2006         2005

  Net sales             $737,340     $625,374   $2,907,304   $2,257,225
  Cost of sales          687,742      580,307    2,707,781    2,095,623

  Gross profit            49,598       45,067      199,523      161,602

  Selling, general
   and administrative
   expenses               17,312       16,015       69,299       62,322
  Restructuring charges      245            -        4,723            -

  Income from operations  32,041       29,052      125,501       99,280

  Other income (expense):
  Interest expense           (86)         (92)        (354)        (330)
  Other                    1,102        2,176        6,610        6,864
  Total other income, net  1,016        2,084        6,256        6,534

  Income before
   income taxes           33,057       31,136      131,757      105,814

  Income tax expense       4,762        6,481       20,080       25,225

  Net income             $28,295      $24,655     $111,677      $80,589

  Denominator for basic
   earnings per share -
   weighted average
   number of common
   shares outstanding
   during the period      64,705       62,985       64,306       62,682
  Incremental common
   shares attributable
   to exercise of
   outstanding dilutive
   options                   692        1,355          815        1,597
  Denominator for diluted
   earnings per share     65,397       64,340       65,121       64,279

  Earnings per share:
  Basic                    $0.44        $0.39        $1.74        $1.29
  Diluted                  $0.43        $0.38        $1.71        $1.25


               Benchmark Electronics, Inc. and Subsidiaries

                   Condensed Consolidated Balance Sheet
                            December 31, 2006
                          (Amounts in Thousands)
                               (UNAUDITED)

  Assets
  Current assets:
   Cash and cash-equivalents                                  $123,872
   Short-term investments                                      100,460
   Accounts receivable, net                                    462,953
   Inventories, net                                            420,347
   Other current assets                                         62,978

    Total current assets                                     1,170,610

  Property, plant and equipment, net                           110,912
  Other assets, net                                             11,599
  Goodwill, net                                                112,999

    Total assets                                            $1,406,120

  Liabilities and Shareholders' Equity

  Current liabilities:
   Accounts payable                                           $335,470
   Other current liabilities                                    74,248

    Total current liabilities                                  409,718

  Other long-term liabilities                                   11,380
  Shareholders' equity                                         985,022

    Total liabilities and shareholders' equity              $1,406,120


               Benchmark Electronics, Inc. and Subsidiaries

           Reconciliation of GAAP to Non-GAAP Financial Results
              Three Months and Year Ended December 31, 2006
              (Amounts in Thousands, Except Per Share Data)
                               (UNAUDITED)

                                     Three Months Ended        Year Ended
                                     December 31, 2006     December 31, 2006

  Income from operations (GAAP)            $32,041              $125,501
  Stock-based compensation                     669                 2,952
  Restructuring charges                        245                 4,723

  Non-GAAP income from operations          $32,955              $133,176

  Net income (GAAP)                        $28,295              $111,677
  Stock-based compensation, net of tax         500                 2,167
  Restructuring charges, net of tax            191                 4,044
  UK investment tax benefit                      -                (4,760)

  Non-GAAP net income                      $28,986              $113,128

  Earnings per share: (GAAP)
   Basic                                     $0.44                 $1.74
   Diluted                                   $0.43                 $1.71

  Earnings per share: (Non-GAAP)
   Basic                                     $0.45                 $1.76
   Diluted                                   $0.44                 $1.74

  Weighted average shares used in
   calculating earnings per share:
   Basic                                    64,705                64,306
   Diluted                                  65,397                65,121

First Call Analyst:
FCMN Contact: james.walker@bench.com

SOURCE: Benchmark Electronics, Inc.

CONTACT: Ellen M. Sykora, Investor Relations of Benchmark Electronics,
Inc., +1-979-849-6550

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