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