Benchmark Electronics, Inc.
"Our diversification has not provided us with immunity from the broad-based economic downturn as end market demand decreased in the first quarter," said Cary T. Fu, the Company's Chief Executive Officer. "We have seen challenging economic cycles before and our teams are focused on serving our customers, generating cash flows and reducing costs. We still see significant outsourcing opportunities, which have resulted in another solid quarter of new program wins. Despite the present challenging environment, we are making long-term investments to position ourselves for continued growth when the recovery occurs."
First Quarter 2009 Financial Highlights
-- Operating margin for the first quarter was 2.0% on a GAAP basis and
2.3%, excluding restructuring charges.
-- Cash flows provided by operating activities for the first quarter were
approximately $64 million.
-- Cash and long-term investments balance was $454 million at March 31,
2009. Long-term investments consist of $47 million of auction rate
securities.
-- Accounts receivable was $338 million at March 31, 2009; calculated
days sales outstanding were 61 days.
-- Inventory was $345 million at March 31, 2009; inventory turns were 5.4
times.
Second Quarter 2009 Outlook
Sales for the second quarter of 2009 are expected to range from $460 million to $520 million. Diluted earnings per share for the second quarter, excluding restructuring charges, are expected to be between $0.13 and $0.21.
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 (loss) and earnings (loss) 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 (loss) 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, our sales and diluted earnings per share, excluding restructuring charges, guidance for the second quarter of 2009, 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, 2008, 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
March 31,
2009 2008
Income from operations (GAAP) $10,172 $21,082
Restructuring charges 1,130 -
Non-GAAP income from operations $11,302 $21,082
Net income (GAAP) $9,238 $22,329
Restructuring charges, net of tax 1,056 -
Non-GAAP net income $10,294 $22,329
Earnings per share: (GAAP)
Basic $0.14 $0.32
Diluted $0.14 $0.32
Earnings per share: (Non-GAAP)
Basic $0.16 $0.32
Diluted $0.16 $0.32
Weighted average shares used in calculating
earnings per share:
Basic 65,097 69,330
Diluted 65,261 69,462
Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
Three Months Ended
March 31,
2009 2008
Net sales $496,767 $684,309
Cost of sales 465,131 639,221
Gross profit 31,636 45,088
Selling, general and administrative expenses 19,891 23,559
Amortization of intangibles 443 447
Restructuring charges and integration costs 1,130 -
Income from operations 10,172 21,082
Other income (expense):
Interest income 839 3,243
Interest expense (351) (365)
Other (396) 1,628
Total other income, net 92 4,506
Income before income taxes 10,264 25,588
Income tax expense 1,026 3,259
Net income $9,238 $22,329
Denominator for basic earnings per share -
weighted average number of common shares
outstanding during the period 65,097 69,330
Incremental common shares attributable to
restricted shares and the exercise of outstanding
equity instruments 164 132
Denominator for diluted earnings per share 65,261 69,462
Earnings per share:
Basic $0.14 $0.32
Diluted $0.14 $0.32
The results for the three months ended March 31, 2008 reflect an
immaterial correction of the Company's prior period financial statements
related to stock-based compensation expense.
Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
March 31, 2009
(Amounts in Thousands)
(UNAUDITED)
Assets
Current assets:
Cash and cash-equivalents $406,939
Accounts receivable, net 337,601
Inventories, net 344,975
Other current assets 35,077
Total current assets 1,124,592
Long-term investments 47,371
Property, plant and equipment, net 130,166
Other assets, net 64,534
Goodwill, net 37,912
Total assets $1,404,575
Liabilities and Shareholders' Equity
Current liabilities:
Current installments of capital lease obligations $265
Accounts payable 255,924
Accrued liabilities 44,465
Total current liabilities 300,654
Capital lease obligations, less current installments 11,614
Other long-term liabilities 29,528
Shareholders' equity 1,062,779
Total liabilities and shareholders' equity $1,404,575
First Call Analyst:
FCMN Contact: james.walker@bench.com
SOURCE: Benchmark Electronics, Inc.
CONTACT: Investor Relations, Ellen M. Dylla of Benchmark Electronics,
Inc., +1-979-849-6550
Web Site: http://www.bench.com/
