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NYSEBHE
Benchmark Electronics Reports Results for the Quarter Ended September 30, 2008
PRNewswire-FirstCall
ANGLETON, Texas

Benchmark Electronics, Inc. , a leading contract manufacturing provider, announced sales of $642 million for the quarter ended September 30, 2008, compared to $673 million for the same quarter in the prior year. Third quarter net income was $24 million, or $0.36 per diluted share. In the comparable period of 2007, net income was $22 million, or $0.30 per diluted share.

Excluding restructuring charges, amortization of intangibles, the impact of stock-based compensation costs and a discrete tax benefit relating to a previously closed facility, the Company would have reported net income of $21 million, or $0.32 per diluted share, in the third quarter of 2008. Excluding restructuring charges, integration costs, amortization of intangibles, the impact of stock-based compensation costs and a discrete tax benefit relating to a previously closed facility, the Company would have reported net income of $17 million, or $0.24 per diluted share, in the third quarter of 2007.

"The recent deterioration and unprecedented volatility in end market demands which began in late September resulted in revenue softness that began to materialize in the third quarter," said Cary T. Fu, the Company's Chief Executive Officer. "Generally, I am pleased with our overall operating performance during the quarter and am confident in the ability of our organization to manage through, and take advantage of, the additional outsourcing opportunities that this environment may bring. Our revenue diversification and new program wins have been strong, but not strong enough to allow us to sidestep the current macro downturn."

  Third Quarter 2008 Financial Highlights
  --  Operating margin for the third quarter was 3.5% on a GAAP basis and
      was 3.6%, excluding restructuring charges, amortization of intangibles
      and the impact of stock-based compensation expense.
  --  Cash flows provided by operating activities for the third quarter were
      approximately $76 million.
  --  Cash and long-term investments totaled $389 million at September 30,
      2008. Long-term investments consist of $48 million of auction rate
      securities.
  --  Accounts receivable was $415 million at September 30, 2008; calculated
      days sales outstanding were 58 days.
  --  Inventory was $363 million at September 30, 2008; inventory turns were
      6.6 times.
  --  Repurchases of common shares for the third quarter totaled $20 million
      or 1.3 million shares.


  Fourth Quarter 2008 Outlook

Recent demand weakness is expected to continue into the fourth quarter of 2008. While it is not possible to forecast with precision the specific impacts to each of the industries we serve, it is anticipated that the slowdown in technology spending will continue. Sales for the fourth quarter of 2008 are expected to range from $600 million to $640 million. To maintain consistency with published analysts' reports, earnings guidance going forward will only exclude restructuring charges and will no longer exclude the impact of stock-based compensation and amortization of intangibles. Diluted earnings per share for the fourth quarter, excluding restructuring charges, are expected to be between $0.25 and $0.32.

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 "it is anticipated that the slowdown in technology spending will continue", that we are "confident in the ability of our organization to not only manage through, but to take advantage of, the additional outsourcing opportunities that this environment may bring", and our sales and diluted earnings per share, excluding restructuring charges, guidance for the fourth 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, 2007, in its other filings with the Securities and Exchange Commission and in its press releases.

Additional Information

Benchmark Electronics, Inc. provides electronics manufacturing, design and engineering 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 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        Nine Months Ended
                                September 30,            September 30,
                              2008       2007           2008      2007

  Income from operations
   (GAAP)                   $22,267    $14,880      $  66,678  $ 69,952
  Stock-based
   compensation                 384        628          2,432     2,440
  Restructuring charges
   and integration costs        253      1,451            253     7,001
  Amortization of
   intangibles                  446        447          1,340     1,341

  Non-GAAP income from
   operations               $23,350    $17,406      $  70,703  $ 80,734

  Net income (GAAP)         $23,925    $22,009      $  68,976  $ 72,406
  Stock-based
   compensation, net
   of tax                       306        443          1,740     1,688
  Restructuring charges
   and integration
   costs, net of tax            228      1,043            228     5,211
  Amortization of
   intangibles, net of
   tax                          284        291            854       905
  Income tax benefit         (3,440)    (6,481)        (3,440)   (6,481)

  Non-GAAP net income       $21,303    $17,305      $  68,358  $ 73,729


  Numerator for basic
   earnings per share
   - net income (GAAP)      $23,925    $22,009      $  68,976  $ 72,406
  Interest expense on
   convertible debt, net
   of tax                         --          --              --       147

  Numerator for diluted
   earnings per share
   (GAAP)                   $23,925    $22,009      $  68,976  $ 72,553


  Earnings per share:
   (GAAP)
      Basic                 $  0.36    $  0.30      $    1.02  $   1.00
      Diluted               $  0.36    $  0.30      $    1.01  $   0.99

  Numerator for basic
   earnings per share -
   net income (Non-GAAP)    $21,303    $17,305      $  68,358  $ 73,729
  Interest expense on
   convertible debt, net
   of tax                         --          --              --       147

  Numerator for diluted
   earnings per share
   (Non-GAAP)               $21,303    $17,305      $  68,358  $ 73,876


  Earnings per share:
   (Non-GAAP)
      Basic                 $  0.32    $  0.24      $    1.01  $   1.02
      Diluted               $  0.32    $  0.24      $    1.00  $   1.01

  Weighted average
   shares used in
   calculating
   earnings per share:
      Basic                  66,268     72,951         67,693    72,314
      Diluted                66,630     73,626         68,251    73,313


                  Benchmark Electronics, Inc. and Subsidiaries

                        Consolidated Statements of Income
                 (Amounts in Thousands, Except Per Share Data)
                                  (UNAUDITED)

                          Three Months Ended         Nine Months Ended
                             September 30,             September 30,
                          2008          2007        2008            2007

  Net sales           $  641,672   $  672,595  $ 2,008,397   $  2,181,372
  Cost of sales          597,376      633,818    1,872,859      2,033,612

      Gross profit        44,296       38,777      135,538        147,760

  Selling, general
   and administrative
   expenses               21,329       21,999       67,266         69,466
  Amortization of
   intangibles               446          447        1,340          1,341
  Restructuring
   charges and
   integration costs         253        1,451          253          7,001

      Income from
       operations         22,268       14,880       66,679         69,952

  Other income
   (expense):
    Interest income        1,680        3,106        6,909          7,555
    Interest expense        (378)        (411)      (1,102)        (1,786)
    Other income
     (expense)              (790)         725        1,547          1,578
  Total other income,
   net                       512        3,420        7,354          7,347

      Income before
       income taxes       22,780       18,300       74,033         77,299

  Income tax expense
   (benefit)              (1,145)      (3,709)       5,057          4,893

      Net income      $   23,925   $   22,009  $    68,976   $     72,406


  Numerator for basic
   earnings per
   share - net
   income             $   23,925   $   22,009  $    68,976   $     72,406
  Interest expense
   on convertible
   debt, net of tax            --            --            --            147
  Numerator for
   diluted earnings
   per share          $   23,925   $   22,009  $    68,976   $     72,553


  Denominator for
   basic earnings
   per share -
   weighted average
   number of common
   shares outstanding
   during the period      66,268       72,951       67,693         72,314
  Incremental common
   shares attributable
   to restricted shares
   and the exercise of
   outstanding equity
   instruments               362          675          558            999
  Denominator for
   diluted earnings
   per share              66,630       73,626       68,251         73,313

  Earnings per share:
      Basic           $     0.36   $     0.30  $      1.02   $       1.00
      Diluted         $     0.36   $     0.30  $      1.01   $       0.99


                  Benchmark Electronics, Inc. and Subsidiaries

                      Condensed Consolidated Balance Sheet
                               September 30, 2008
                             (Amounts in Thousands)
                                   (UNAUDITED)

  Assets

  Current assets:
    Cash and cash-equivalents                           $  341,361
    Accounts receivable, net                               415,455
    Inventories, net                                       362,692
    Other current assets                                    51,204

      Total current assets                               1,170,712

  Long-term investments                                     47,907
  Property, plant and equipment, net                       141,745
  Other assets, net                                         25,810
  Goodwill, net                                            283,194

      Total assets                                      $1,669,368

  Liabilities and Shareholders' Equity
  Current liabilities:
    Current installments of long-term
     debt and capital lease obligations                 $      273
    Accounts payable                                       289,725
    Accrued liabilities                                     58,697

      Total current liabilities                            348,695

  Long-term debt and capital lease obligations,
   less current installments                                11,749
  Other long-term liabilities                               41,501

  Shareholders' equity                                   1,267,423

      Total liabilities and shareholders' equity        $1,669,368

First Call Analyst:
FCMN Contact: james.walker@bench.com

SOURCE: Benchmark Electronics, Inc.

CONTACT: Ellen M. Dylla, Investor Relations of Benchmark Electronics,
Inc., +1-979-849-6550

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