Benchmark Electronics, Inc.
"We are seeing positive signs that the economy is beginning to slowly recover as our customers are more confident," said Cary T. Fu, the Company's Chief Executive Officer. "Our team has done a great job during this downturn. We've expanded our customer base and service capabilities, aggressively reduced our costs, realigned our capacity and improved our efficiencies. These actions have put us in a great position to benefit from the economic recovery."
Third Quarter 2009 Financial Highlights -- Operating margin for the third quarter was 2.3% on a GAAP basis and 3.0%, excluding restructuring charges. -- Cash flows provided by operating activities for the third quarter and the first nine months of 2009 were approximately $41 million and $117 million, respectively. -- Cash and long-term investments balance was $484 million at September 30, 2009. Long-term investments consist of $46 million of auction rate securities. -- Accounts receivable was $378 million at September 30, 2009; calculated days sales outstanding were 67 days. -- Inventory was $294 million at September 30, 2009; inventory turns were 6.5 times. -- Repurchases of common shares for the third quarter totaled $6 million or 0.4 million shares. -- Restructuring charges for the third quarter of 2009 were approximately $3.8 million primarily related to capacity reduction and severance related costs in Europe. -- Income tax benefit includes a $2.4 million ($0.04 per diluted share) discrete tax benefit related to a revaluation loss in Mexico. Fourth Quarter 2009 Outlook
Sales for the fourth quarter of 2009 are expected to range from $520 million to $560 million. Diluted earnings per share for the fourth quarter, excluding restructuring charges, are expected to be between $0.22 and $0.26.
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, our sales and diluted earnings per share (excluding restructuring charges) guidance for the fourth 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. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.
All forward-looking statements included in this release are based upon information available to Benchmark as of the date of this release, and Benchmark assumes no obligation to update any such forward-looking statements. 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.
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 Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Income from operations (GAAP) $11,674 $21,857 $34,199 $65,446 Restructuring charges 3,754 253 5,901 253 Non-GAAP income from operations $15,428 $22,110 $40,100 $65,699 Net income (GAAP) $16,416 $23,635 $37,209 $68,106 Restructuring charges, net of tax 3,647 228 5,343 228 Discrete US tax benefit (2,668) (3,440) (2,668) (3,440) Non-GAAP net income $17,395 $20,423 $39,884 $64,894 Earnings per share: (GAAP) Basic $0.25 $0.36 $0.57 $1.01 Diluted $0.25 $0.35 $0.57 $1.00 Earnings per share: (Non-GAAP) Basic $0.27 $0.31 $0.61 $0.96 Diluted $0.27 $0.31 $0.61 $0.95 Weighted average shares used in calculating earnings per share: Basic 64,754 66,268 64,955 67,693 Diluted 65,194 66,630 65,206 68,251 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, 2009 2008 2009 2008 Net sales $510,461 $641,672 $1,489,030 $2,008,397 Cost of sales 473,648 597,503 1,386,027 1,873,240 Gross profit 36,813 44,169 103,003 135,157 Selling, general and administrative expenses 21,385 22,059 62,903 69,458 Restructuring charges 3,754 253 5,901 253 Income from operations 11,674 21,857 34,199 65,446 Other income (expense): Interest income 382 1,680 1,710 6,909 Interest expense (350) (378) (1,051) (1,102) Other (575) (790) (970) 1,547 Total other income (expense), net (543) 512 (311) 7,354 Income before income taxes 11,131 22,369 33,888 72,800 Income tax benefit (expense) 5,285 1,266 3,321 (4,694) Net income $16,416 $23,635 $37,209 $68,106 Denominator for basic earnings per share - weighted average number of common shares outstanding during the period 64,754 66,268 64,955 67,693 Incremental common shares attributable to restricted shares and the assumed exercise of outstanding equity instruments 440 362 251 558 Denominator for diluted earnings per share 65,194 66,630 65,206 68,251 Earnings per share: Basic $0.25 $0.36 $0.57 $1.01 Diluted $0.25 $0.35 $0.57 $1.00 The results for the three and nine months ended September 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 September 30, 2009 (Amounts in Thousands) (UNAUDITED) Assets Current assets: Cash and cash-equivalents $438,044 Accounts receivable, net 378,492 Inventories, net 293,550 Other current assets 47,499 Total current assets 1,157,585 Long-term investments 46,306 Property, plant and equipment, net 127,867 Other assets, net 61,398 Goodwill, net 37,912 Total assets $1,431,068 Liabilities and Shareholders' Equity Current liabilities: Current installments of capital lease obligations $285 Accounts payable 239,697 Accrued liabilities 60,396 Total current liabilities 300,378 Capital lease obligations, less current installments 11,459 Other long-term liabilities 24,654 Shareholders' equity 1,094,577 Total liabilities and shareholders' equity $1,431,068
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SOURCE: Benchmark Electronics, Inc.
CONTACT: Ellen M. Dylla, Investor Relations of Benchmark Electronics,
Web Site: http://www.bench.com/