Benchmark Electronics, Inc.
"End market demand stabilized during the quarter, except for the computing sector, which saw declines from the first quarter. These declines were offset by increased sales in all the other sectors we serve," said Cary T. Fu, the Company's Chief Executive Officer. "We improved profitability from the first quarter, reduced inventories and generated operating cash flows and, at the same time, aligned our capacity with customer demand. In recent weeks we have seen the pipeline of opportunities increase, but we remain guarded about the overall economy."
Second Quarter 2009 Financial Highlights
-- Operating margin for the second quarter was 2.6% on a GAAP basis and
2.8%, excluding restructuring charges.
-- Cash flows provided by operating activities for the second quarter and
first half were approximately $13 million and $77 million,
respectively.
-- Cash and long-term investments balance was $452 million at June 30,
2009. Long-term investments consist of $48 million of auction rate
securities.
-- Accounts receivable was $350 million at June 30, 2009; calculated days
sales outstanding were 66 days.
-- Inventory was $322 million at June 30, 2009; inventory turns were 5.6
times.
-- Repurchases of common shares for the second quarter totaled $4 million
or 0.3 million shares.
Third Quarter 2009 Outlook
Sales for the third quarter of 2009 are expected to range from $470 million to $520 million. Diluted earnings per share for the third quarter, excluding restructuring charges, are expected to be between $0.17 and $0.22.
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, our sales and diluted earnings per share (excluding restructuring charges), guidance for the third 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 24 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 Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Income from operations (GAAP) $12,353 $22,507 $22,525 $43,589
Restructuring charges 1,017 - 2,147 -
------- ------- ------- -------
Non-GAAP income from operations $13,370 $22,507 $24,672 $43,589
======= ======= ======= =======
Net income (GAAP) $11,555 $22,142 $20,793 $44,471
Restructuring charges, net
of tax 641 - 1,696 -
------- ------- ------- -------
Non-GAAP net income $12,196 $22,142 $22,489 $44,471
======= ======= ======= =======
Earnings per share: (GAAP)
Basic $0.18 $0.33 $0.32 $0.65
Diluted $0.18 $0.33 $0.32 $0.65
Earnings per share: (Non-GAAP)
Basic $0.19 $0.33 $0.35 $0.65
Diluted $0.19 $0.33 $0.34 $0.65
Weighted average shares used
in calculating earnings
per share:
Basic 65,018 67,541 65,057 68,436
Diluted 65,197 67,714 65,315 68,672
Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Net sales $481,802 $682,416 $978,569 $1,366,725
Cost of sales 447,248 636,516 912,379 1,275,737
------- ------- ------- ---------
Gross profit 34,554 45,900 66,190 90,988
Selling, general and
administrative expenses 21,184 23,393 41,518 47,399
Restructuring charges 1,017 - 2,147 -
----- ------ ----- ------
Income from operations 12,353 22,507 22,525 43,589
Other income (expense):
Interest income 489 1,986 1,328 5,229
Interest expense (350) (359) (701) (724)
Other 1 709 (395) 2,337
--- ----- ----- -----
Total other income, net 140 2,336 232 6,842
--- ----- ----- -----
Income before income taxes 12,493 24,843 22,757 50,431
Income tax expense 938 2,701 1,964 5,960
--- ----- ----- -----
Net income $11,555 $22,142 $20,793 $44,471
======= ======= ======= =======
Denominator for basic
earnings per share -
weighted average number of
common shares outstanding
during the period 65,018 67,541 65,057 68,436
Incremental common shares
attributable to restricted
shares and the exercise of
outstanding equity
instruments 179 173 258 236
--- --- --- ---
Denominator for diluted
earnings per share 65,197 67,714 65,315 68,672
====== ====== ====== ======
Earnings per share:
Basic $0.18 $0.33 $0.32 $0.65
===== ===== ===== =====
Diluted $0.18 $0.33 $0.32 $0.65
===== ===== ===== =====
The results for the three and six months ended June 30, 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
June 30, 2009
(Amounts in Thousands)
(UNAUDITED)
Assets
Current assets:
Cash and cash-equivalents $403,760
Accounts receivable, net 350,474
Inventories, net 322,220
Other current assets 44,717
------
Total current assets 1,121,171
Long-term investments 48,394
Property, plant and equipment, net 132,517
Other assets, net 63,099
Goodwill, net 37,912
------
Total assets $1,403,093
==========
Liabilities and Shareholders' Equity
Current liabilities:
Current installments of capital lease obligations $273
Accounts payable 229,164
Accrued liabilities 53,210
------
Total current liabilities 282,647
Capital lease obligations, less current installments 11,537
Other long-term liabilities 29,956
Shareholders' equity 1,078,953
---------
Total liabilities and shareholders' equity $1,403,093
==========
First Call Analyst:
FCMN Contact: james.walker@bench.com
SOURCE: Benchmark Electronics, Inc.
CONTACT: Investor Relations, Ellen M. Dylla, +1-979-849-6550, for
Benchmark Electronics, Inc.
Web Site: http://www.bench.com/
