EX-99.1 2 a07-3700_1ex99d1.htm EX-99.1

Exhibit 99.1

Press Release

For More Information, Call:

ELLEN M. SYKORA

INVESTOR RELATIONS

February 6, 2007

(979) 849-6550

FOR IMMEDIATE RELEASE

BENCHMARK ELECTRONICS REPORTS RESULTS FOR THE

QUARTER AND YEAR ENDED DECEMBER 31, 2006

Annual Sales Up 29% and Earnings Up 39%

ANGLETON, TX, FEBRUARY 6, 2007 — Benchmark Electronics, Inc. (NYSE: BHE), a leading contract manufacturing provider, announced sales of $737 million for the quarter ended December 31, 2006, compared to $625 million for the same quarter in the prior year. Fourth quarter net income was $28.3 million, or $0.43 per diluted share. In the comparable period of 2005, net income was $24.7 million, or $0.38 per diluted share. Excluding restructuring charges and the impact of stock-based compensation expense, the Company would have reported net income of $29.0 million, or $0.44 per diluted share, in the fourth quarter of 2006.

Sales for the year ended December 31, 2006 were $2.9 billion, a 29% increase from $2.3 billion in the previous year. Net income for the year ended December 31, 2006 was $111.7 million, or $1.71 per diluted share. In the prior year, net income was $80.6 million, or $1.25 per diluted share. Excluding restructuring charges, the impact of stock-based compensation expense and a tax benefit resulting from the closure of our UK facility, the Company would have reported net income of $113.1 million, or $1.74 per diluted share, in 2006.

“We are pleased with our performance in the fourth quarter. We had a solid finish to 2006 and achieved record annual sales and earnings” stated Benchmark’s CEO Cary T. Fu. “Our teams have delivered strong revenue growth for the past five years.”

Fourth Quarter 2006 Financial Highlights

·                  Operating margin for the fourth quarter was 4.3% on a GAAP basis and was 4.5%, excluding restructuring charges and the impact of stock-based compensation expense.

·                  Cash flows used in operating activities for the fourth quarter were $28 million.

·                  Cash and short-term investments balance at December 31, 2006 of $224 million.

·                  No debt outstanding.

·                  Accounts receivable balance at December 31, 2006 of $463 million; calculated days sales outstanding were 57 days.

·                  Inventory of $420 million at December 31, 2006, a decrease of $112 million compared to September 30; inventory turns were 6.5 times.

·                  Effective tax rate for the full year 2006 of 15.2% compared to 23.8% in 2005.



2007 Outlook

The outlook for Benchmark remains positive moving into fiscal 2007. A moderation in end market demands and growth rates is expected when compared to 2006. For 2007, including the impact of the acquisition of Pemstar, we expect top line growth of 12-15% for the year and earnings growth in the range of 15-20%, excluding integration costs and the impact of stock-based compensation expense.

Specifically, sales for the first quarter of 2007 are expected to be between $735 million and $765 million. Diluted earnings per share for the first quarter, excluding integration costs and the impact of stock-based compensation expense, are expected to be between $0.37 and $0.42.

Non-GAAP Financial Measures

This press release includes financial measures for earnings and earnings per share that excludes 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.

Non-GAAP information 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. In particular, statements, express or implied, concerning future operating results or the ability to generate sales, income or cash flow are forward-looking statements. 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, customer actions and the other factors discussed in Benchmark’s Form 10-K for the year ended December 31, 2005 and its other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.



Additional Information

Benchmark Electronics, Inc. is in the business of manufacturing electronics and provides its 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. With the acquisition of Pemstar, Benchmark’s global operations now include 24 facilities in nine 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

Consolidated Statements of Income

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

737,340

 

$

625,374

 

$

2,907,304

 

$

2,257,225

 

Cost of sales

 

687,742

 

580,307

 

2,707,781

 

2,095,623

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

49,598

 

45,067

 

199,523

 

161,602

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

17,312

 

16,015

 

69,299

 

62,322

 

Restructuring charges

 

245

 

—

 

4,723

 

—

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

32,041

 

29,052

 

125,501

 

99,280

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense

 

(86

)

(92

)

(354

)

(330

)

Other

 

1,102

 

2,176

 

6,610

 

6,864

 

Total other income, net

 

1,016

 

2,084

 

6,256

 

6,534

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

33,057

 

31,136

 

131,757

 

105,814

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

4,762

 

6,481

 

20,080

 

25,225

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

28,295

 

$

24,655

 

$

111,677

 

$

80,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator for basic earnings per share - weighted average number of common shares outstanding during the period

 

64,705

 

62,985

 

64,306

 

62,682

 

Incremental common shares attributable to exercise of outstanding dilutive options

 

692

 

1,355

 

815

 

1,597

 

Denominator for diluted earnings per share

 

65,397

 

64,340

 

65,121

 

64,279

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.44

 

$

0.39

 

$

1.74

 

$

1.29

 

Diluted

 

$

0.43

 

$

0.38

 

$

1.71

 

$

1.25

 

 



Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet

December 31, 2006

(Amounts in Thousands)

(UNAUDITED)

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

Cash and cash-equivalents

 

$

123,872

 

Short-term investments

 

100,460

 

Accounts receivable, net

 

462,953

 

Inventories, net

 

420,347

 

Other current assets

 

62,978

 

Total current assets

 

1,170,610

 

 

 

 

 

Property, plant and equipment, net

 

110,912

 

Other assets, net

 

11,599

 

Goodwill, net

 

112,999

 

Total assets

 

$

1,406,120

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

Accounts payable

 

$

335,470

 

Other current liabilities

 

74,248

 

Total current liabilities

 

409,718

 

 

 

 

 

Other long-term liabilities

 

11,380

 

Shareholders’ equity

 

985,022

 

Total liabilities and shareholders’ equity

 

$

1,406,120

 

 



Benchmark Electronics, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Results

Three Months and Year Ended December 31, 2006

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 31, 2006

 

December 31, 2006

 

Income from operations (GAAP)

 

$

32,041

 

$

125,501

 

Stock-based compensation

 

669

 

2,952

 

Restructuring charges

 

245

 

4,723

 

Non-GAAP income from operations

 

$

32,955

 

$

133,176

 

 

 

 

 

 

 

Net income (GAAP)

 

$

28,295

 

$

111,677

 

Stock-based compensation, net of tax

 

500

 

2,167

 

Restructuring charges, net of tax

 

191

 

4,044

 

UK investment tax benefit

 

—

 

(4,760

)

Non-GAAP net income

 

$

28,986

 

$

113,128

 

 

 

 

 

 

 

Earnings per share: (GAAP)

 

 

 

 

 

Basic

 

$

0.44

 

$

1.74

 

Diluted

 

$

0.43

 

$

1.71

 

Earnings per share: (Non-GAAP)

 

 

 

 

 

Basic

 

$

0.45

 

$

1.76

 

Diluted

 

$

0.44

 

$

1.74

 

Weighted average shares used in calculating earnings per share:

 

 

 

 

 

Basic

 

64,705

 

64,306

 

Diluted

 

65,397

 

65,121