Benchmark Electronics, Inc.
"Benchmark Electronics, Inc. continues to have solid performance," said Cary T. Fu, the Company's Chief Executive Officer. "We saw strong booking performance in the first quarter derived from both existing and new customers. Challenges during the first half of 2007 are seen with the softer market conditions and the ongoing customer initiatives focused on reducing inventory levels. However, we have seen excellent growth opportunities with our new bookings and new product initiatives with several customers and are optimistic that we will see steady improvement in business conditions as the year progresses."
First Quarter 2007 Financial Highlights
-- Operating margin for the first quarter was 3.6% on a GAAP basis and was
4.2%, excluding restructuring charges, integration costs, amortization
of intangibles and the impact of stock-based compensation expense.
-- Cash flows provided by operating activities for the first quarter were
approximately $95 million.
-- Cash and short-term investments balance at March 31, 2007 of $257
million.
-- Total debt outstanding of $23 million.
-- Accounts receivable balance at March 31, 2007 of $512 million;
calculated days sales outstanding were 61 days.
-- Inventory of $464 million at March 31, 2007; inventory turns were 6.0
times.
Second Quarter 2007 Guidance
Sales for the second quarter of 2007 are expected to be between $740 million and $775 million. Diluted earnings per share for the second quarter, excluding restructuring charges, integration costs, amortization of intangibles and the impact of stock-based compensation expense, are expected to be between $0.36 and $0.41.
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. Such forward-looking statements may be deemed to include, among other things, statements, express or implied, concerning: future operating results or the ability to generate sales, income or cash flow; Benchmark's business and growth strategies, including expected internal growth and performance goals; and the anticipated effects of any developments or events on financial results. 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, and customer actions.
All forward-looking statements included in this release are based upon information available to Benchmark as of the date of the release, and Benchmark assumes no obligation to update any such forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Persons are advised to consult further disclosures on related subjects in Benchmark's Form 10-K for the year ended December 31, 2006, in its other filings with the Securities and Exchange Commission and in its press releases.
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. Benchmark's global operations 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
Reconciliation of GAAP to Non-GAAP Financial Results
Three Months Ended March 31, 2007 and 2006
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
Three Months Ended
March 31,
2007 2006
Income from operations (GAAP) $27,448 $26,227
Stock-based compensation 628 486
Restructuring charges and integration costs 3,345 2,769
Amortization of intangibles 447 --
Non-GAAP income from operations $31,868 $29,482
Net income (GAAP) $24,476 $26,522
Stock-based compensation, net of tax 442 372
Restructuring charges and integration costs,
net of tax 2,617 2,553
Amortization of intangibles, net of tax 322 --
UK investment tax benefit -- (4,760)
Non-GAAP net income $27,857 $24,687
Numerator for basic earnings per share -- net
income (GAAP) $24,476 $26,522
Interest expense on convertible debt,
net of tax 115 --
Numerator for diluted earnings per share (GAAP) $24,591 $26,522
Earnings per share: (GAAP)
Basic $0.34 $0.42
Diluted $0.34 $0.41
Numerator for basic earnings per share -- net
income (Non-GAAP) $27,857 $24,687
Interest expense on convertible debt, net of tax 115 --
Numerator for diluted earnings per share
(Non-GAAP) $27,972 $24,687
Earnings per share: (Non-GAAP)
Basic $0.39 $0.39
Diluted $0.39 $0.38
Weighted average shares used in calculating
earnings per share:
Basic 71,435 63,601
Diluted 72,465 64,825
Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
Three Months Ended
March 31,
2007 2006
Net sales $ 752,482 $ 651,244
Cost of sales 697,994 605,878
Gross profit 54,488 45,366
Selling, general and administrative
expenses 23,248 16,370
Amortization of intangibles 447 --
Restructuring charges and integration
costs 3,345 2,769
Income from operations 27,448 26,227
Other income (expense):
Interest expense (811) (86)
Other 1,715 1,689
Total other income, net 904 1,603
Income before income taxes 28,352 27,830
Income tax expense 3,876 1,308
Net income $ 24,476 $ 26,522
Numerator for basic earnings
per share -- net income $ 24,476 26,522
Interest expense on convertible debt,
net of tax 115 --
Numerator for diluted earnings per share $ 24,591 $ 26,522
Denominator for basic earnings per
share -- weighted average number of common
shares outstanding during the period 71,435 63,601
Incremental common shares attributable to
exercise of outstanding equity instruments 1,030 1,224
Denominator for diluted earnings per share 72,465 64,825
Earnings per share:
Basic $ 0.34 $ 0.42
Diluted $ 0.34 $ 0.41
Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
March 31, 2007
(Amounts in Thousands)
(UNAUDITED)
Assets
Current assets:
Cash and cash-equivalents $151,570
Short-term investments 105,660
Accounts receivable, net 512,464
Inventories, net 463,528
Other current assets 91,851
Total current assets 1,325,073
Property, plant and equipment, net 163,073
Other assets, net 28,292
Goodwill, net 297,778
Total assets $1,814,216
Liabilities and Shareholders' Equity
Current liabilities:
Current installments of long-term debt
and capital lease obligations $5,816
Convertible debt 5,000
Accounts payable 416,873
Other current liabilities 111,913
Total current liabilities 539,602
Long-term debt and capital lease obligations,
less current installments 12,581
Other long-term liabilities 14,167
Shareholders' equity 1,247,866
Total liabilities and
shareholders' equity $1,814,216
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
Web site: http://www.bench.com/
