8-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):    February 4, 2014

BENCHMARK ELECTRONICS, INC.

(Exact name of registrant as specified in its charter)

Texas (State or other jurisdiction of incorporation) 1-10560 (Commission File Number) 74-2211011 (I.R.S. Employer Identification No.)

3000 Technology Drive, Angleton, Texas77515 

(Address of principal executive offices)  (Zip code)

Registrant’s telephone number, including area code:  (979) 849-6550

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

     [  ] Written communications pursuant to Rule 425 under the Securities Act

     (17 CFR 230.425)

     [  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act

     (17 CFR 240.14a-12)

     [  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the

     Exchange Act (17 CFR 240.14d-2(b))

     [  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the

     Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.   Results of Operations and Financial Condition.

On February 4, 2014, Benchmark Electronics, Inc. issued a press release announcing the results of operations for the quarter and year ended December 31, 2013 and held an earnings conference call at 10:00 am (Central time). A copy of the press release and the presentation slides are attached as Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K and are hereby incorporated herein by reference.

The information in this report, being furnished pursuant to Item 2.02 of Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01.   Financial Statements and Exhibits.

                (d)  Exhibits 

Exhibit 99.1  Press release dated February 4, 2014.

Exhibit 99.2  Presentation slides for earnings conference call.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BENCHMARK ELECTRONICS, INC.

Dated: February 4, 2014	By: /s/ Donald F. Adam
	Donald F. Adam
	Chief Financial Officer

EXHIBITS INDEX

Exhibit

NumberDescription 

            Exhibit 99.1          Press release dated February 4, 2014.

            Exhibit 99.2          Presentation slides for earnings conference call.

EX-99.1

 

Exhibit 99.1

FOR IMMEDIATE RELEASE

BENCHMARK ELECTRONICS REPORTS RESULTS FOR THE

QUARTER AND YEAR ENDED DECEMBER 31, 2013

ANGLETON, TX, FEBRUARY4, 2014 – Benchmark Electronics, Inc. (NYSE: BHE), a leading integrated contract manufacturing provider, today announced financial results for the fourth quarter and year which ended December 31, 2013.

	Three Months Ended
	December 31,		September 30,		December 31,
	2013		2013		2012
Net sales (in millions)	$757		$600		$634
Net income (in millions)	$67		$24		$18
Net income – non-GAAP (in millions)	$24		$17		$18
Diluted EPS	$1.24		$0.43		$0.33
Diluted EPS – non-GAAP	$0.43		$0.31		$0.33
Operating margin (%)	8.0	%	4.9	%	3.9	%
Operating margin – non-GAAP (%)	4.1	%	3.5	%	3.7	%

	Year Ended
	December 31,
	2013		2012
Net sales (in millions)	$2,506		$2,468
Net income (in millions)	$111		$57
Net income – non-GAAP (in millions)	$69		$68
Diluted EPS	$2.03		$1.00
Diluted EPS – non-GAAP	$1.26		$1.21
Operating margin (%)	4.6	%	3.1	%
Operating margin – non-GAAP (%)	3.5	%	3.5	%

“We completed 2014 with a robust fourth quarter and year-over-year growth. Revenue and earnings exceeded our fourth quarter expectations with growth driven organically by revenue from new programs as well as revenue contributions from recent acquisitions,” said Gayla J. Delly, the Company’s President and CEO. “Strong revenues combined with operating discipline allowed us to achieve an operating margin of 4.1% for the quarter. We see continued strength in our pipeline of opportunities and are optimistic about the long-term growth of the Company.”

Fourth Quarter 2013 Highlights

·Revenue of $757 million increased 26%from Q3 2013.

·New program bookings in Q4 2013 were $150 million to $180 million.

·Restructuring andintegration and acquisition-related costs totaled$2 million.

·Thailand flood related items includes insurance recoveries of $31 million including $11 million for property, plant and equipment losses and $20 million for inventory and business interruption losses. The recovery process with our insurance carriers is largely complete and we expect final resolution in the first quarter of 2014.

·Cash flows used in operating activities for Q42013 were approximately $1 million, which includes approximately $20 million of Thailand flood insurance recoveries for inventory and business interruption losses.

·Cash and cash equivalents balance was $346 million at December 31, 2013.

·Accounts receivable was $560 million at December 31, 2013; calculated days sales outstanding were 67 days compared to 64 days at September 30, 2013 and 65 days at December 31, 2012.

·Inventory was $397million at December 31, 2013; inventory turns were 7.0 times compared to 5.6 at September 30, 2013 and 7.3 at December 31, 2012.

·Repurchases of common shares for the fourth quarter totaled $10 million or 462thousand shares. 

·Non-GAAP operating margin for the fourth quarter was 4.1%.

Fourth Quarter Industry Sector Update

The following table sets forth revenue by industry sector for the quarters ended December 31, 2013, September 30, 2013 and December 31, 2012.

		December 31,		September 30,		December 31,
		2013		2013		2012
Computers and related products for business
	enterprises	32	%	30	%	33	%
Industrial control equipment		27		31		27
Telecommunication equipment		24		20		25
Medical devices		10		12		10
Testing and instrumentation products		7		7		5
		100	%	100	%	100	%

First Quarter 2014Outlook 

·Revenue between $630 and $660 million.

·Diluted earnings per share between $0.29 and $0.34 (excluding restructuring, integration and Thailand flood related items).

Conference Call Details

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.

About Benchmark Electronics, Inc.

Benchmark Electronics, Inc. provides integrated manufacturing, design and engineering services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment (which includes equipment for the aerospace and defense industry), testing and instrumentation products, and telecommunication equipment. Benchmark’s global operations include facilities in seven countries. Benchmark’s Common Shares trade on the New York Stock Exchange under the symbol BHE.

For More Information, Please Contact:

Lisa K. Weeks, VP of Strategy & Investor Relations

979-849-6550 (ext. 1361) or lisa.weeks@bench.com

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 statements“we see continued strength in our pipeline of opportunities and are optimistic about the long-term growth of the Company” and “the recovery process with our insurance carriers is largely complete and we expect final resolution in the first quarter of 2014”, our sales and diluted earnings per share (excluding special items) guidance for the first quarter of 2014, as well as other statements, express or implied, concerning: the potential recovery of insurance proceeds; 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. 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, 2012, in its other filings with the Securities and Exchange Commission and in its press releases.

###

Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
			Three Months Ended				Year Ended
			December 31,				December 31,
			2013		2012		2013		2012
Sales		$	756,843	$	633,933	$	2,506,467	$	2,468,150
Cost of sales			697,000		588,474		2,319,983		2,291,412
	Gross profit		59,843		45,459		186,484		176,738
Selling, general and administrative expenses			29,120		22,218		99,331		89,951
Restructuring charges and integration
and acquisition-related costs			2,025		1,427		9,348		2,200
Asset impairment charge and other			-		-		2,606		-
Thailand flood related items, net of insurance			(31,577)		(2,770)		(41,325)		9,028
	Income from operations		60,275		24,584		116,524		75,559
Interest expense			(531)		(490)		(1,934)		(1,580)
Interest income			691		371		1,688		1,306
Other income (expense), net			(661)		58		(101)		154
	Income before income taxes		59,774		24,523		116,177		75,439
Income tax expense (benefit)			(7,715)		6,408		5,018		18,832
	Net income	$	67,489	$	18,115	$	111,159	$	56,607
Earnings per share:
	Basic	$	1.26	$	0.33	$	2.05	$	1.01
	Diluted	$	1.24	$	0.33	$	2.03	$	1.00
Weighted-average number of shares used in calculating earnings per share:
	Basic		53,773		55,038		54,213		56,320
	Diluted		54,327		55,256		54,779		56,634

Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
					December 31,		December 31,
					2013		2012
					(unaudited)
Assets
	Current assets:
		Cash and cash equivalents		$	345,555	$	384,579
		Accounts receivable, net			559,763		459,081
		Inventories, net			396,699		324,041
		Other current assets			40,816		46,490
			Total current assets		1,342,833		1,214,191
	Long-term investments				9,921		10,324
	Property, plant and equipment, net				185,319		176,104
	Goodwill and other, net				119,298		100,858
			Total assets	$	1,657,371	$	1,501,477
Liabilities and Shareholders’ Equity
	Current liabilities:
		Current installments of capital lease obligations		$	582	$	497
		Accounts payable			320,953		260,622
		Accrued liabilities			76,842		69,396
			Total current liabilities		398,377		330,515
	Capital lease obligations, less current installments				9,521		10,103
	Other long-term liabilities				22,440		21,334
	Shareholders’ equity				1,227,033		1,139,525
			Total liabilities and shareholders’ equity	$	1,657,371	$	1,501,477

EX-99.2

Fourth Quarter Fiscal 2013 February 4, 2014 Financial Results

design develop deliver advanced technology 2 Forward - Looking Statements This document contains forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended . In addition, from time to time, Benchmark Electronics, Inc . (“the Company”) or its representatives have made or may make forward - looking statements, orally or in writing . Such forward - looking statements may be included in, but are not limited to, various filings made by the Company with the Securities and Exchange Commission, press releases or oral statements made with the approval of an authorized executive officer of the Company . Actual results could differ materially from those projected or suggested in any forward - looking statements as a result of many factors, some of which have been described in the section of the Company’s Annual Report on Form 10 - K for the year ended December 31 , 2012 , entitled “Risk Factors,” and in other documents the Company’s files from time to time, with the Securities and Exchange Commission, including annual reports on Form 10 - K, quarterly reports on Form 10 - Q and current reports on Form 8 - K . This document 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 GAAP results and results excluding special items (non - GAAP) is included in our press release and in the Appendix of this presentation .

design develop deliver advanced technology 3 Fourth Quarter 2013 Results (In millions, except EPS) Dec. 31, 2013 Sept. 30, 2013 Dec. 31, 2012 Net Sales $756.8 $599.7 $633.9 Net Income – GAAP $67.5 $23.7 $18.1 Net Income – non - GAAP $23.5 $16.9 $18.0 Diluted EPS – GAAP $1.24 $0.43 $0.33 Diluted EPS – non - GAAP $0.43 $0.31 $0.33 Operating Margin – GAAP 8.0% 4.9% 3.9% Operating Margin – non - GAAP 4.1% 3.5% 3.7% Effective Tax Rate – non - GAAP 22.2% 21.3% 22.2% For the Three Months Ended Results exceeded Guidance Provided for the December 31, 2013 Quarter: ▪ Revenue $685 – $715 ▪ Diluted EPS – non - GAAP $0.34 – $0.38

design develop deliver advanced technology 4 Fiscal Year 2013 Results (In millions, except EPS) Dec. 31, 2013 Dec. 31, 2012 Net Sales $2,506 $2,468 Net Income – GAAP $111 $57 Net Income – non - GAAP $69 $68 Diluted EPS – GAAP $2.03 $1.00 Diluted EPS – non - GAAP $1.26 $1.21 Operating Margin – GAAP 4.6% 3.1% Operating Margin – non - GAAP 3.5% 3.5% Effective Tax Rate – non - GAAP 20.3% 21.2% For Years Ending ▪ Year - over - Year growth in a difficult demand environment ▪ Substantially closed out actions related to the Thailand flood

design develop deliver advanced technology 5 Fourth Quarter Industry Sector Update Sector Dec. 31, 2013 Sept. 30, 2013 Dec. 31, 2012 Computers and Related Products for Business Enterprises 32% 30% 33% Industrial Control Equipment 27% 31% 27% Telecommunication Equipment 24% 20% 25% Medical Devices 10% 12% 10% Testing and Instrumentation Products 7% 7% 5% Total Revenue 100% 100% 100% Revenue by Industry Sector

design develop deliver advanced technology 6 Financial Statement Highlights Balance Sheet and Cash Flows (In millions) Dec. 31, 2013 Sept. 30, 2013 Dec. 31, 2012 Cash $345.6* $426.6 $384.6 Cash Flow from Operating Activities ($0.6) $38.7 $80.9 Acquisitions $75.0 $0 $0 Capital Expenditures $8.6 $6.8 $13.5 Depreciation & Amortization $11.3 $10.1 $9.3 Accounts Receivable $559.8 $423.6 $459.1 Days Sales Outstanding 67 64 65 Inventory $396.7 $395.0 $324.0 Inventory Turns 7.0x 5.6x 7.3x Total Cost of Shares Repurchased $10.5 $9.4 $15.7 * Approximately $38 million of cash is in the U.S.

design develop deliver advanced technology 7 First Quarter 2014 Guidance Guidance Net Sales (in millions) $630 – $660 Diluted EPS – non - GAAP $0.29 – $0.34 ▪ Outlook is for the first fiscal quarter ending March 31, 2014.

design develop deliver advanced technology 8 CEO and President Commentary

design develop deliver advanced technology 9 Fourth Quarter 2013 New Business Wins Q4 2013 Number of New Business Wins by Segment ▪ Q4 2013: 33 new business bookings including 10 engineering projects ▪ E stimated annual revenue run rate between $150 million and $180 million Quarterly Estimated Annual Revenue Run Rate for New Business Wins

design develop deliver advanced technology 10 Benchmark 2014 Market Overview ▪ Computing Mixed ▪ Industrial Growth ▪ Telecommunications Growth ▪ Medical Stable ▪ Test & Instrumentation Growth Reporting Sector Outlook

design develop deliver advanced technology 11 ▪ Strong Q4 Results ▪ Solid 2013 Performance ▪ Continuing Progress in Three Key Focus Areas: o Operational Excellence o Portfolio Management o Customer Focus and New Bookings Summary Fourth Quarter and Full Year 2013

design develop deliver advanced technology 12 Appendix

design develop deliver advanced technology 13 Reconciliation of GAAP to non - GAAP Financial Results (Amounts in Thousands, Except Per Share Data) – (UNAUDITED) December 31, September 30, December 31, 2013  2013  2012  2013  2012  $ 60,275  $ 29,473  $ 24,584  $ 116,524  $ 75,559  2,025  1,214  1,427  9,348  2,200  -  -  -  2,606  -  (31,577) (9,748) (2,770) (41,325) 9,028  $ 30,723  $ 20,939  $ 23,241  $ 87,153  $ 86,787  $ 67,489  $ 23,726  $ 18,115  $ 111,159  $ 56,607  1,343  1,002  1,249  8,290  1,833  -  -  -  2,849  -  (27,810) (7,817) (1,319) (35,627) 9,862  (17,500) -  -  (17,500) -  $ 23,522  $ 16,911  $ 18,045  $ 69,171  $ 68,302  Basic $ 1.26  $ 0.44  $ 0.33  $ 2.05  $ 1.01  Diluted $ 1.24  $ 0.43  $ 0.33  $ 2.03  $ 1.00  Basic $ 0.44  $ 0.31  $ 0.33  $ 1.28  $ 1.21  Diluted $ 0.43  $ 0.31  $ 0.33  $ 1.26  $ 1.21  Three Months Ended Year Ended net of tax December 31, Income from operations (GAAP) Restructuring charges and integration and acquisition-related costs Asset impairment charge and other Thailand flood related items Non-GAAP income from operations Net income (GAAP) Restructuring charges and integration and acquisition-related costs, net of tax Asset impairment charge and other, Thailand flood related items, net of tax Discrete US tax benefit Non-GAAP net income Earnings per share: (GAAP) Earnings per share: (Non-GAAP)