EX-99.1 2 v120710_ex99-1.htm Unassociated Document

Press Release
For More Information, Call:

ELLEN M. DYLLA
  
INVESTOR RELATIONS
July 24, 2008
(979) 849-6550
  

FOR IMMEDIATE RELEASE

BENCHMARK ELECTRONICS REPORTS RESULTS FOR THE
QUARTER ENDED JUNE 30, 2008

ANGLETON, TX, JULY 24, 2008 – Benchmark Electronics, Inc. (NYSE: BHE), a leading contract manufacturing provider, announced sales of $682 million for the quarter ended June 30, 2008, compared to $756 million for the same quarter in the prior year. Second quarter net income was $22 million, or $0.33 per diluted share. In the comparable period of 2007, net income was $26 million, or $0.35 per diluted share.

Excluding amortization of intangibles and the impact of stock-based compensation costs, the Company would have reported net income of $24 million, or $0.35 per diluted share, in the second quarter of 2008. Excluding restructuring charges, integration costs, amortization of intangibles and the impact of stock-based compensation costs, the Company would have reported net income of $29 million, or $0.39 per diluted share, in the second quarter of 2007.

“Our focus in this environment is on strong operational execution and solid program bookings,” said Cary T. Fu, the Company’s Chief Executive Officer. “Operationally our execution was solid during the second quarter, although revenues were impacted by maturing programs declining at a more rapid pace than our new programs ramped, and by the impact of a soft macro environment. We believe this is a near-term challenge and that we are well positioned for growth, given the number of new programs that we have won.”
 
Second Quarter 2008 Financial Highlights
 
 
·
Operating margin for the second quarter was 3.4% on a GAAP basis and was 3.6%, excluding amortization of intangibles and the impact of stock-based compensation expense.
 
·
Cash flows provided by operating activities for the second quarter were approximately $2 million.
 
·
Cash, short-term and long-term investments balance was $344 million at June 30, 2008. Long-term investments consist of $55 million of auction rate securities.
 
·
Accounts receivable was $472 million at June 30, 2008; calculated days sales outstanding were 62 days.
 
·
Inventory was $393 million at June 30, 2008; inventory turns were 6.5 times.
 
·
Repurchases of common shares for the second quarter totaled $30 million. On July 21, 2008, the Company completed the repurchase of 6.8 million shares under the $125 million share repurchase program approved in July 2007.


PR July 24, 2008
Page 2
 
Third Quarter 2008 Outlook
 
Looking forward, sales for the third quarter of 2008 are expected to range from $650 million to $690 million. Diluted earnings per share for the third quarter, excluding amortization of intangibles and the impact of stock-based compensation expense, are expected to be between $0.32 and $0.37.

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 statement that “we believe this is a near-term challenge and that we are well positioned for growth, given the number of new programs that we have won”, and our sales and earnings per share guidance for the third quarter of 2008, 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.


PR July 24, 2008
Page 3
 
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, 2007, 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 20 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.

###


PR July 24, 2008
Page 4
 
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,
  
   
2008
  
2007
  
2008
  
2007
  
                   
Income from operations (GAAP)
  
$
22,918
  
$
27,624
  
$
44,411
  
$
55,072
  
Stock-based compensation
    
1,260
    
1,184
    
2,048
    
1,812
  
Restructuring charges and integration costs
    
—
    
2,205
    
—
    
5,550
  
Amortization of intangibles
    
447
    
447
    
894
    
894
  
                           
Non-GAAP income from operations
  
$
24,625
  
$
31,460
  
$
47,353
  
$
63,328
  
                           
                           
                           
Net income (GAAP)
  
$
22,432
  
$
25,921
  
$
45,051
  
$
50,397
  
Stock-based compensation, net of tax
    
877
    
803
    
1,434
    
1,245
  
Restructuring charges and integration costs, net of tax
    
—
    
1,551
    
—
    
4,168
  
Amortization of intangibles, net of tax
    
285
    
292
    
570
    
614
  
                           
Non-GAAP net income
  
$
23,594
  
$
28,567
  
$
47,055
  
$
56,424
  
                           
                           
Numerator for basic earnings per share - net income (GAAP)
  
$
22,432
  
$
25,921
  
$
45,051
  
$
50,397
  
Interest expense on convertible debt, net of tax
    
—
    
32
    
—
    
147
  
                           
Numerator for diluted earnings per share (GAAP)
 
$
22,432
  
$
25,953
  
$
45,051
  
$
50,544
  
                           
                           
Earnings per share: (GAAP)
                          
Basic
  
$
0.33
  
$
0.36
  
$
0.66
  
$
0.70
  
Diluted
  
$
0.33
  
$
0.35
  
$
0.66
  
$
0.69
  
                           
Numerator for basic earnings per share - net income (Non-GAAP)
  
$
23,594
  
$
28,567
  
$
47,055
  
$
56,424
  
Interest expense on convertible debt, net of tax
    
—
    
32
    
—
    
147
  
                           
Numerator for diluted earnings per share (Non-GAAP)
  
$
23,594
  
$
28,599
  
$
47,055
  
$
56,571
  
                           
                           
Earnings per share: (Non-GAAP)
                          
Basic
  
$
0.35
  
$
0.39
  
$
0.69
  
$
0.78
  
Diluted
  
$
0.35
  
$
0.39
  
$
0.69
  
$
0.77
  
                           
Weighted average shares used in calculating earnings per share:
                          
Basic
    
67,541
    
72,540
    
68,436
    
71,991
  
Diluted
    
67,714
    
73,346
    
68,672
    
73,026
  

 
PR July 24, 2008
Page 5

Benchmark Electronics, Inc. and Subsidiaries

Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)

   
Three Months Ended
June 30,
  
Six Months Ended
June 30,
  
   
2008
  
2007
  
2008
  
2007
  
                   
Net sales
  
$
682,416
  
$
756,295
  
$
1,366,725
  
$
1,508,777
  
Cost of sales
    
636,389
    
701,800
    
1,275,483
    
1,399,794
  
                           
Gross profit
    
46,027
    
54,495
    
91,242
    
108,983
  
                           
Selling, general and administrative expenses
    
22,662
    
24,219
    
45,937
    
47,467
  
Amortization of intangibles
    
447
    
447
    
894
    
894
  
Restructuring charges and integration costs
    
—
    
2,205
    
—
  
5,550
  
                           
Income from operations
    
22,918
    
27,624
    
44,411
    
55,072
  
                           
Other income (expense):
                          
Interest income
    
1,986
    
2,700
    
5,229
    
4,449
  
Interest expense
    
(359
)
  
(564
)
  
(724
)
  
(1,375
)
Other
    
709
    
887
    
2,337
    
853
  
Total other income, net
    
2,336
    
3,023
    
6,842
    
3,927
  
                           
Income before income taxes
    
25,254
    
30,647
    
51,253
    
58,999
  
                           
Income tax expense
    
2,822
    
4,726
    
6,202
    
8,602
  
                           
Net income
  
$
22,432
  
$
25,921
  
$
45,051
  
$
50,397
  
                           
                           
Numerator for basic earnings per share - net income
  
$
22,432
  
$
25,921
  
$
45,051
  
$
50,397
  
Interest expense on convertible debt, net of tax
    
—
    
32
    
—
    
147
  
Numerator for diluted earnings per share
  
$
22,432
  
$
25,953
  
$
45,051
  
$
50,544
  
                           
                           
Denominator for basic earnings per share - weighted average number of common shares outstanding during the period
    
67,541
    
72,540
    
68,436
    
71,991
  
Incremental common shares attributable to exercise of outstanding equity instruments
    
173
    
806
    
236
    
1,035
  
Denominator for diluted earnings per share
    
67,714
    
73,346
    
68,672
    
73,026
  
Earnings per share:
                        
Basic
  
$
0.33
  
$
0.36
  
$
0.66
  
$
0.70
  
Diluted
  
$
0.33
  
$
0.35
  
$
0.66
  
$
0.69
  
 

 
Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet
June 30, 2008
(Amounts in Thousands)
(UNAUDITED)

Assets
        
         
Current assets:
        
Cash and cash-equivalents
  
$
288,015
  
Short-term investments
    
1,000
  
Accounts receivable, net
    
472,183
  
Inventories, net
    
393,020
  
Other current assets
    
58,818
  
         
Total current assets
    
1,213,036
  
         
Long-term investments
    
55,484
  
Property, plant and equipment, net
    
145,209
  
Other assets, net
    
27,337
  
Goodwill, net
    
285,125
  
         
Total assets
  
$
1,726,191
  
         
Liabilities and Shareholders’ Equity
        
         
Current liabilities:
        
Current installments of long-term debt and capital lease obligations
  
$
333
  
Accounts payable
    
339,715
  
Accrued liabilities
    
55,051
  
         
Total current liabilities
    
395,099
  
         
Long-term debt and capital lease obligations, less current installments
    
12,000
  
Other long-term liabilities
    
44,505
  
Shareholders’ equity
    
1,274,587
  
         
Total liabilities and shareholders’ equity
  
$
1,726,191