Benchmark Electronics, Inc.
Excluding amortization of intangibles and the impact of stock-based compensation costs, the Company would have reported net income of $23 million, or $0.34 per diluted share, in the first quarter of 2008. Excluding restructuring charges, integration costs, amortization of intangibles and the impact of stock-based compensation costs, the Company would have reported net income of $28 million, or $0.39 per diluted share, in the first quarter of 2007.
"We are pleased with our first quarter operating results considering the soft demand environment in several of the industries that we serve," said Cary T. Fu, the Company's Chief Executive Officer. "We have seen an increase in interest from customers and prospective customers, as they continue to expand their outsourcing efforts. We believe our new program bookings provide excellent opportunities for near-term stability and long-term growth even while some of the industries we serve may experience lackluster demand during 2008."
First Quarter 2008 Financial Highlights
-- Operating margin for the first quarter was 3.1% on a GAAP basis and
was 3.3%, excluding amortization of intangibles and the impact of
stock-based compensation expense.
-- Cash flows provided by operating activities for the first quarter were
approximately $46 million.
-- Cash and short-term investments balance was $302 million at
March 31, 2008 after the reclassification of $77 million of auction
rate securities to long-term.
-- Accounts receivable was $453 million at March 31, 2008; calculated
days sales outstanding were 60 days.
-- Inventory was $397 million at March 31, 2008; inventory turns were
6.4 times.
-- Repurchases of common shares for the first quarter totaled
$37 million. Total repurchases under the plan through April 23, 2008
were $103 million.
2008 Outlook
Looking forward, sales for the second quarter of 2008 are expected to range from $715 million to $750 million. Diluted earnings per share for the second quarter, excluding amortization of intangibles and the impact of stock-based compensation expense, are expected to be between $0.35 and $0.41.
For the year-ended December 31, 2008, we now expect revenues to grow at a more moderated pace of 2% to 5%, which will come primarily from the ramp of new programs. At the same time, we are maintaining our earnings per share growth in the range of 15% to 20%.
Non-GAAP Financial Measures
This press release includes financial measures for earnings and earnings per share that exclude 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.
The non-GAAP information included in this press release 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 believe our new program bookings provide excellent opportunities for near-term stability and long-term growth even while some of the industries we serve may experience lackluster demand during 2008," and our sales and earnings per share guidance for the second quarter and full year 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, 2007, 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 manufacturing locations 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
March 31,
2008 2007
Income from operations (GAAP) $ 21,493 $ 27,448
Stock-based compensation 788 628
Restructuring charges and integration
costs - 3,345
Amortization of intangibles 447 447
Non-GAAP income from operations $ 22,728 $ 31,868
Net income (GAAP) $ 22,619 $ 24,476
Stock-based compensation, net of tax 557 442
Restructuring charges and integration
costs, net of tax - 2,617
Amortization of intangibles, net of tax 285 322
Non-GAAP net income $ 23,461 $ 27,857
Numerator for basic earnings per share
- net income (GAAP) $ 22,619 $ 24,476
Interest expense on convertible debt,
net of tax - 115
Numerator for diluted earnings per
share (GAAP) $ 22,619 $ 24,591
Earnings per share: (GAAP)
Basic $ 0.33 $ 0.34
Diluted $ 0.33 $ 0.34
Numerator for basic earnings per share
- net income (Non-GAAP) $ 23,461 $ 27,857
Interest expense on convertible debt,
net of tax - 115
Numerator for diluted earnings per
share (Non-GAAP) $ 23,461 $ 27,972
Earnings per share: (Non-GAAP)
Basic $ 0.34 $ 0.39
Diluted $ 0.34 $ 0.39
Weighted average shares used in
calculating earnings per share:
Basic 69,330 71,435
Diluted 69,462 72,465
Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
Three Months
Ended
March 31,
2008 2007
Net sales $ 684,309 $ 752,482
Cost of sales 639,094 697,994
Gross profit 45,215 54,488
Selling, general and administrative
expenses 23,275 23,248
Amortization of intangibles 447 447
Restructuring charges and integration costs - 3,345
Income from operations 21,493 27,448
Other income (expense):
Interest income 3,243 1,749
Interest expense (365) (811)
Other 1,628 (34)
Total other income, net 4,506 904
Income before income taxes 25,999 28,352
Income tax expense 3,380 3,876
Net income $ 22,619 $ 24,476
Numerator for basic earnings per
share - net income $ 22,619 $ 24,476
Interest expense on convertible debt,
net of tax - 115
Numerator for diluted earnings per share $ 22,619 $ 24,591
Denominator for basic earnings per share
- weighted average number of common
shares outstanding during the period 69,330 71,435
Incremental common shares attributable to
exercise of outstanding equity instruments 132 1,030
Denominator for diluted earnings per share 69,462 72,465
Earnings per share:
Basic $ 0.33 $ 0.34
Diluted $ 0.33 $ 0.34
Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
March 31, 2008
(Amounts in Thousands)
(UNAUDITED)
Assets
Current assets:
Cash and cash-equivalents $ 300,717
Short-term investments 1,008
Accounts receivable, net 452,952
Inventories, net 397,150
Other current assets 61,156
Total current assets 1,212,983
Long-term investments 77,280
Property, plant and equipment, net 143,898
Other assets, net 28,594
Goodwill, net 285,027
Total assets $ 1,747,782
Liabilities and Shareholders' Equity
Current liabilities:
Current installments of long-term debt and capital
lease obligations $ 375
Accounts payable 355,794
Accrued liabilities 60,428
Total current liabilities 416,597
Long-term debt and capital lease obligations, less
current installments 12,045
Other long-term liabilities 43,082
Shareholders' equity 1,276,058
Total liabilities and shareholders' equity $ 1,747,782
First Call Analyst:
FCMN Contact: james.walker@bench.com
SOURCE: Benchmark Electronics, Inc.
CONTACT: Ellen M. Dylla, Investor Relations, +1-979-849-6550, for
Benchmark Electronics, Inc.
Web site: http://www.bench.com/
