Benchmark Electronics, Inc.
Excluding restructuring charges, integration costs, amortization of intangibles and the impact of stock-based compensation costs, the Company would have reported net income of $25 million, or $0.35 per diluted share, in the fourth quarter of 2007. Excluding restructuring charges and the impact of stock-based compensation costs, the Company would have reported net income of $29 million, or $0.44 per diluted share, in the fourth quarter of 2006.
Sales for the years ended December 31, 2007 and 2006 were each $2.9 billion. Net income for the year ended December 31, 2007 was $93 million, or $1.28 per diluted share. In the prior year, net income was $112 million, or $1.71 per diluted share.
Excluding restructuring charges, integration costs, amortization of intangibles, the impact of stock-based compensation costs and a discrete tax benefit related to a previously closed facility, the Company would have reported net income of $98 million, or $1.35 per diluted share, in 2007. 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 million, or $1.74 per diluted share, in 2006.
"In 2007 we achieved several major goals -- we expanded our customer base, enhanced our manufacturing and engineering capabilities, completed the integration of recent acquisitions, and realigned our manufacturing facilities," said Cary T. Fu, the Company's Chief Executive Officer. "We are delighted to have the heavy lifting behind us. We are on an excellent pathway for increased business from new and existing customers in 2008."
Fourth Quarter 2007 Financial Highlights
-- Operating margin for the fourth quarter was 3.0% on a GAAP basis and
was 3.7%, excluding restructuring charges, integration costs,
amortization of intangibles and the impact of stock-based compensation
expense.
-- Cash flows provided by operating activities for the fourth quarter were
approximately $59 million.
-- Cash and short-term investments balance was $382 million at
December 31, 2007.
-- Total debt outstanding was $13 million.
-- Accounts receivable was $486 million at December 31, 2007; calculated
days sales outstanding were 60 days.
-- Inventory was $362 million at December 31, 2007; inventory turns were
7.6 times.
-- Repurchases of common shares through February 4, 2008 were $74 million.
2008 Outlook
For 2008, we expect top line growth of 5-8% for the year and earnings per share growth in the range of 15-20%, excluding amortization of intangibles and the impact of stock-based compensation expense.
Looking forward, sales for the first quarter of 2008 are expected to be between $700 million and $725 million. Diluted earnings per share for the first quarter, excluding amortization of intangibles and the impact of stock-based compensation expense, are expected to be between $0.33 and $0.37.
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. Our forward-looking statements may be deemed to include, among other things, the statement that "we expect top line growth of 5-8% for the year and earnings per share growth in the range of 15-20%, excluding amortization of intangibles and the impact of stock-based compensation expense," and our sales and earnings per share guidance for the first quarter of 2008, as well as other statements, express or implied, concerning: future operating results or the ability to generate sales, income or cash flow; and Benchmark's business and growth strategies, including expected internal growth and performance goals. 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 20 facilities in ten 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
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
Income from operations (GAAP) $21,681 $32,041 $91,633 $125,501
Stock-based compensation 680 669 3,120 2,952
Restructuring charges and
integration costs 4,580 245 11,581 4,723
Amortization of intangibles 447 - 1,788 -
Non-GAAP income from operations $27,388 $32,955 $108,122 $133,176
Net income (GAAP) $20,876 $28,295 $93,282 $111,677
Stock-based compensation,
net of tax 478 500 2,166 2,167
Restructuring charges and
integration costs, net of tax 3,080 191 8,291 4,044
Amortization of intangibles,
net of tax 291 - 1,196 -
Income tax benefit - - (6,481) (4,760)
Non-GAAP net income $24,725 $28,986 $98,454 $113,128
Numerator for basic earnings
per share - net income (GAAP) $20,876 $28,295 $93,282 $111,677
Interest expense on convertible
debt, net of tax - - 147 -
Numerator for diluted earnings
per share (GAAP) $20,876 $28,295 $93,429 $111,677
Earnings per share: (GAAP)
Basic $0.29 $0.44 $1.29 $1.74
Diluted $0.29 $0.43 $1.28 $1.71
Numerator for basic earnings per
share - net income (Non-GAAP) $24,725 $28,986 $98,454 $113,128
Interest expense on convertible
debt, net of tax - - 147 -
Numerator for diluted
earnings per share (Non-GAAP) $24,725 $28,986 $98,601 $113,128
Earnings per share: (Non-GAAP)
Basic $0.35 $0.45 $1.37 $1.76
Diluted $0.35 $0.44 $1.35 $1.74
Weighted average shares used in
calculating earnings per share:
Basic 71,309 64,705 72,061 64,306
Diluted 71,555 65,397 72,829 65,121
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,
2007 2006 2007 2006
Net sales $734,547 $737,340 $2,915,919 $2,907,304
Cost of sales 683,373 687,742 2,716,985 2,707,781
Gross profit 51,174 49,598 198,934 199,523
Selling, general and
administrative expenses 24,466 17,312 93,932 69,299
Amortization of intangibles 447 - 1,788 -
Restructuring charges and
integration costs 4,580 245 11,581 4,723
Income from operations 21,681 32,041 91,633 125,501
Other income (expense):
Interest expense (397) (86) (2,183) (354)
Other 2,777 1,102 11,910 6,610
Total other income, net 2,380 1,016 9,727 6,256
Income before income
taxes 24,061 33,057 101,360 131,757
Income tax expense 3,185 4,762 8,078 20,080
Net income $20,876 $28,295 $93,282 $111,677
Numerator for basic earnings
per share - net income $20,876 $28,295 $93,282 $111,677
Interest expense on
convertible debt,
net of tax - - 147 -
Numerator for diluted
earnings per share $20,876 $28,295 $93,429 $111,677
Denominator for basic
earnings per share -
weighted-average number of
common shares outstanding
during the period 71,309 64,705 72,061 64,306
Incremental common shares
attributable to exercise
of outstanding equity
instruments 246 692 768 815
Denominator for diluted
earnings per share 71,555 65,397 72,829 65,121
Earnings per share:
Basic $0.29 $0.44 $1.29 $1.74
Diluted $0.29 $0.43 $1.28 $1.71
Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
December 31, 2007
(Amounts in Thousands)
(UNAUDITED)
Assets
Current assets:
Cash and cash-equivalents $199,198
Short-term investments 182,825
Accounts receivable, net 485,907
Inventories, net 361,952
Other current assets 75,409
Total current assets 1,305,291
Property, plant and equipment, net 144,182
Other assets, net 29,650
Goodwill, net 283,725
Total assets $1,762,848
Liabilities and Shareholders' Equity
Current liabilities:
Current installments of long-term debt
and capital lease obligations $430
Accounts payable 359,422
Accrued liabilities 61,208
Total current liabilities 421,060
Long-term debt and capital lease obligations,
less current installments 12,096
Other long-term liabilities 41,170
Shareholders' equity 1,288,522
Total liabilities and shareholders'
equity $1,762,848
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/
