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.
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.
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
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SOURCE: Benchmark Electronics, Inc.
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Benchmark Electronics, Inc.
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