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.
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.
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
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SOURCE: Benchmark Electronics, Inc.
CONTACT: Ellen M. Sykora, Investor Relations of Benchmark Electronics,
Web site: http://www.bench.com/