Benchmark Electronics, Inc.
"Throughout the second quarter we have seen increases in customer demand," said Cary T. Fu, the Company's Chief Executive Officer. "The supply chain constraints as well as customer mix changes adversely impacted both revenue and inventory levels for the second quarter."
Second Quarter 2010 Financial Highlights
-- Operating margin for the second quarter was 4.0%.
-- Cash flows used by operating activities for the second quarter were
approximately $24 million.
-- Cash and long-term investments balance was $397 million at June 30,
2010. Long-term investments consist of $46 million of auction rate
securities.
-- Accounts receivable was $413 million at June 30, 2010; calculated days
sales outstanding were 63 days.
-- Inventory was $389 million at June 30, 2010; inventory turns were 5.6
times.
-- Repurchases of common shares for the second quarter totaled $15
million or 0.8 million shares.
Industry Sectors
The following table sets forth sales by industry sector for the quarter ended June 30, 2010 and March 31, 2010.
June 30, March 31,
2010 2010
---- ----
Computers and related products for business
enterprises 31% 32%
Telecommunications equipment 23% 23%
Industrial control equipment 25% 24%
Medical devices 10% 12%
Testing and instrumentation products 11% 9%
Third Quarter 2010 Outlook
Sales for the third quarter of 2010 are expected to range from $590 million to $630 million. Diluted earnings per share for the third quarter, excluding restructuring charges, are expected to be between $0.33 and $0.36.
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 2010, 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, 2009, in its other filings with the Securities and Exchange Commission and in its press releases.
Additional Information
Benchmark Electronics, Inc. provides integrated 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 23 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 Six Months
Ended Ended
June 30, June 30,
2010 2009 2010 2009
---- ---- ---- ----
Income from operations
(GAAP) $23,862 $12,353 $44,994 $22,525
Restructuring charges - 1,017 1,697 2,147
--- ----- ----- -----
Non-GAAP income from
operations $23,862 $13,370 $46,691 $24,672
======= ======= ======= =======
Net income (GAAP) $20,777 $11,555 $39,027 $20,793
Restructuring charges,
net of tax - 641 847 1,696
--- --- --- -----
Non-GAAP net income $20,777 $12,196 $39,874 $22,489
======= ======= ======= =======
Earnings per share:
(GAAP)
Basic $0.33 $0.18 $0.62 $0.32
Diluted $0.33 $0.18 $0.61 $0.32
Earnings per share:
(Non-GAAP)
Basic $0.33 $0.19 $0.63 $0.35
Diluted $0.33 $0.19 $0.63 $0.34
Weighted average
shares used in
calculating
earnings per share:
Basic 62,695 65,018 63,047 65,057
Diluted 63,243 65,197 63,598 65,315
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,
2010 2009 2010 2009
---- ---- ---- ----
Net sales $589,449 $481,802 $1,161,354 $978,569
Cost of sales 542,555 447,248 1,069,115 912,379
------- ------- --------- -------
Gross profit 46,894 34,554 92,239 66,190
Selling, general
and administrative
expenses 23,032 21,184 45,548 41,518
Restructuring
charges - 1,017 1,697 2,147
--- ----- ----- -----
Income from
operations 23,862 12,353 44,994 22,525
Other income
(expense):
Interest income 447 489 814 1,328
Interest expense (340) (350) (679) (701)
Other (679) 1 (1,050) (395)
---- --- ------ ----
Total other income
(expense), net (572) 140 (915) 232
---- --- ---- ---
Income before
income taxes 23,290 12,493 44,079 22,757
Income tax expense 2,513 938 5,052 1,964
----- --- ----- -----
Net income $20,777 $11,555 $39,027 $20,793
======= ======= ======= =======
Denominator for
basic earnings per
share - 62,695 65,018 63,047 65,057
weighted average
number of common
shares
outstanding during
the period
Incremental common
shares
attributable to 548 179 551 258
restricted shares
and the exercise
of outstanding --- --- --- ---
equity instruments
Denominator for
diluted earnings
per share 63,243 65,197 63,598 65,315
====== ====== ====== ======
Earnings per share:
Basic $0.33 $0.18 $0.62 $0.32
===== ===== ===== =====
Diluted $0.33 $0.18 $0.61 $0.32
===== ===== ===== =====
Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
June 30, 2010
(Amounts in Thousands)
(UNAUDITED)
Assets
------
Current assets:
Cash and cash-equivalents $351,477
Accounts receivable, net 413,448
Inventories, net 389,023
Other current assets 48,672
------
Total current assets 1,202,620
Long-term investments 45,559
Property, plant and equipment, net 127,105
Other assets, net 57,820
Goodwill, net 37,912
------
Total assets $1,471,016
==========
Liabilities and Shareholders' Equity
Current liabilities:
Current installments of capital lease
obligations $333
Accounts payable 281,494
Accrued liabilities 57,397
------
Total current liabilities 339,224
Capital lease obligations, less current
installments 11,202
Other long-term liabilities 25,168
Shareholders' equity 1,095,422
---------
Total liabilities and shareholders' equity $1,471,016
==========
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
Web Site: http://www.bench.com/
