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):    October 27, 2011

BENCHMARK ELECTRONICS, INC.

(Exact name of registrant as specified in its charter)

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

3000 Technology Drive, Angleton, Texas	77515
(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 October 27, 2011, Benchmark Electronics, Inc. issued a press release announcing results for the quarter ended September 30, 2011. A copy of the press release is attached as Exhibit 99.1 hereto and is hereby incorporated herein by reference. The information in this Form 8-K is being furnished under Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01.   Regulation FD Disclosure.

As a result of the flooding in Thailand, the Company’s previously announced suspension of its operations in Ayudhaya continues to be in effect. Local officials have estimated that the flooding will continue through the middle of November 2011, at which time they will begin to pump water from the industrial park.

The Company’s Thailand facilities are among its largest, generating 20-25% of the Company’s revenue. As a result, the impact on revenue and operations will be significant for the next several fiscal quarters. The Company is evaluating the situation on an on-going basis and is working to mitigate the impact to the Company and its customers. The Company carries property and business interruption insurance that it believes is appropriate and adequate in this situation.

The Company and its customers are developing contingency and recovery plans that aim to enable the Company to meet customer needs. As part of those plans, the Company expects to restart production at its Korat, Thailand facility in November 2011 and is shifting production from the Ayudhaya facility to its various other sites around the globe. As a result of the capital purchases associated with the Company’s contingency plans, it anticipates higher than normal capital expenditures in the fourth quarter of 2011, in an amount in the range of $20 to $25 million.

The uncertainties of the impact of the Thailand flooding on the Company’s operations make it challenging to provide guidance. The guidance provided in the press release attached as Exhibit 99.1 was developed using the following assumptions: (1) production at the Korat, Thailand facility will resume on the first week of November 2011, (2) the Company will gain access to the Ayudhaya, Thailand facilities in December to assess damage and begin recovery efforts and (3) $4 million in related insurance recovery proceeds will be received by the Company by December 2011. The guidance does not include any charges or expenses directly related to the flooding and resuming production at the Ayudhaya facilities after the water recedes. The statements included in this release reflect the Company’s assessment of information available to it as of the date of this release, but should any of the underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.

Item 9.01.   Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1        Press release dated October 27, 2011

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: October 27, 2011	By:	/s/ Donald F. Adam
	Donald F. Adam
	Chief Financial Officer

EXHIBITS INDEX

Exhibit
Number	Description
Exhibit 99.1	Press release dated October 27, 2011

EX-99.1

Exhibit 99.1

Press Release

For More Information, Call:

ELLEN M. DYLLA
INVESTOR RELATIONS	October 27, 2011
(979) 849-6550

FOR IMMEDIATE RELEASE

BENCHMARK ELECTRONICS REPORTS RESULTS FOR THE

QUARTER ENDED SEPTEMBER 30, 2011

Company to discuss impact of Thailand Flood in Today’s Conference Call

ANGLETON, TX, OCTOBER 27, 2011 – Benchmark Electronics, Inc. (NYSE: BHE), a leading integrated contract manufacturing provider, announced sales of $570 million for the quarter ended September 30, 2011, compared to $614 million for the same quarter in the prior year. The Company reported third quarter net income of $20 million, or $0.34 per diluted share, which includes a discrete income tax benefit of $9 million, or $0.16 per diluted share. In the comparable period in 2010, the Company reported net income of $22 million, or $0.36 per diluted share. Excluding restructuring charges, the Company would have reported net income of $20 million, or $0.34 per diluted share, in the third quarter of 2011 and $23 million, or $0.37 per diluted share, in the same quarter of 2010.

“During the quarter we experienced an unanticipated decline in demand primarily concentrated in the test and instrumentation industry. The significant drop in revenues, and to a lesser extent, transition costs to low-cost geographies, adversely impacted our operating margin for the quarter,” said Cary T. Fu, the Company’s Chief Executive Officer.

“Recently, we announced that our Thailand facilities have been impacted by severe regional flooding. Our teams first focused on ensuring the safety of our employees and jointly working disaster recovery plans with our customers. To ensure that our customers’ critical requirements are met in Q4 and beyond, we are rapidly ramping capacity at our other facilities around the world including our recently restarted facility in Korat, Thailand. We are grateful for our dedicated employees in Thailand who have worked tirelessly supporting customers while managing personal challenges associated with the flood. We also want to thank our customers for their support with our transition activities. While there are many unknowns remaining at this time, we anticipate resuming full support for customer demands in Q1 of 2012.”

Third Quarter 2011 Financial Highlights

· Income tax benefit includes $9 million ($0.16 per diluted share) of net discrete tax benefits primarily related to income tax valuation allowances. Excluding these tax benefits the tax rate for the quarter was 7.4%.

· Operating margin for the third quarter was 2.1% excluding restructuring charges.

· Cash flows used in operating activities for the third quarter were approximately $12 million.

· Cash and long-term investments balance was $279 million at September 30, 2011. Long-term investments consist of $25 million of auction rate securities.

· Accounts receivable was $463 million at September 30, 2011; calculated days sales outstanding were 73 days.

· Inventory was $430 million at September 30, 2011; inventory turns were 5.0 times.

· Repurchases of common shares for the third quarter totaled $29 million or 2 million shares.

Industry Sectors

The following table sets forth sales by industry sector for the quarters ended September 30, 2011, June 30, 2011 and September 30, 2010.

	September 30,			June 30,			September 30,
	2011			2011			2010
Industrial control equipment		29	%		28	%		26	%
Computers and related products for business enterprises		28	%		28	%		31	%
Telecommunications equipment		27	%		23	%		22	%
Medical devices		9	%		10	%		10	%
Testing and instrumentation products		7	%		11	%		11	%

Fourth Quarter 2011 Outlook

The uncertainties of the impact of the unprecedented Thailand flooding on our operations make it challenging to provide guidance. Without giving effect to further adverse changes in the Thailand situation or the effect of the costs and expenses of returning that facility to operation after the waters recede, sales for the fourth quarter of 2011 are expected to range from $475 million to $525 million. Diluted earnings per share for the fourth quarter, excluding restructuring charges, are expected to be between $0.00 and $0.11. The guidance provided includes the benefit of mitigation efforts to support production at alternate sites and a projected level of insurance recoveries associated with our business interruption coverage.

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, statements related to suspending operations at our manufacturing facilities in Ayudhaya, Thailand, the potential recovery of insurance proceeds associated with our business interruption coverage, and the potential related effects on our future revenues, our sales and diluted earnings per share (excluding special items) guidance for the fourth quarter of 2011, 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 uncertainties concerning Thailand and the extent of damage to our facilities and equipment, the timeframe for the flood waters in Thailand receding and the restoration of operations and associated costs with such restoration, our ability to effectively shift production from our Ayudhaya facilities to other facilities in order to maintain supply continuity for our customers, 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, 2010, 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, which includes equipment for the aerospace and defense industry, testing and instrumentation products, and telecommunication equipment. Benchmark’s global operations include 21 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. As previously reported, the Company will provide an update of the impact of the severe flooding in Thailand on its Ayudhaya facility. 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,
	2011		2010		2011		2010
Income from operations (GAAP)	$	11,616	$	23,361	$	41,563	$	67,607
Restructuring charges		145		452		625		2,149
Non-GAAP income from operations	$	11,761	$	23,813	$	42,188	$	69,756
Net income (GAAP)	$	19,867	$	22,469	$	49,081	$	60,748
Restructuring charges, net of tax		115		365		592		1,283
Non-GAAP net income	$	19,982	$	22,834	$	49,673	$	62,031
Earnings per share: (GAAP)
Basic	$	0.34	$	0.36	$	0.82	$	0.97
Diluted	$	0.34	$	0.36	$	0.81	$	0.96
Earnings per share: (Non-GAAP)
Basic	$	0.34	$	0.37	$	0.83	$	0.99
Diluted	$	0.34	$	0.37	$	0.82	$	0.98
Weighted average shares used in calculating earnings per share:
Basic		58,615		61,712		59,889		62,597
Diluted		58,879		62,103		60,391		63,162

Benchmark Electronics, Inc. and Subsidiaries

Consolidated Statements of Income

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Net sales	$	570,083		$	613,864		$	1,693,944		$	1,775,218
Cost of sales		535,448			566,672			1,583,934			1,636,535
Gross profit		34,635			47,192			110,010			138,683
Selling, general and administrative expenses		22,874			23,379			67,822			68,927
Restructuring charges		145			452			625			2,149
Income from operations		11,616			23,361			41,563			67,607
Other income (expense):
Interest income		446			394			1,293			1,208
Interest expense		(334	)		(343	)		(997	)		(1,022	)
Other		(202	)		1,212			94			162
Total other income (expense), net		(90	)		1,263			390			348
Income before income taxes		11,526			24,624			41,953			67,955
Income tax expense (benefit)		(8,341	)		2,155			(7,128	)		7,207
Net income	$	19,867		$	22,469		$	49,081		$	60,748
Denominator for basic earnings per share - weighted average number of common shares outstanding during the period		58,615			61,712			59,889			62,597
Incremental common shares attributable to restricted shares and the exercise of outstanding equity instruments		264			391			502			565
Denominator for diluted earnings per share		58,879			62,103			60,391			63,162
Earnings per share:
Basic	$	0.34		$	0.36		$	0.82		$	0.97
Diluted	$	0.34		$	0.36		$	0.81		$	0.96

The results for the three and nine months ended September 30, 2010 reflect corrections to the Company’s prior period financial statements, related to inventory and accounts payable balances, that the Company deems immaterial. The aggregate impact of these corrections on earnings per share was $0.01 and $0.02 for the three and nine months ended September 30, 2010, respectively.

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet

September 30, 2011

(Amounts in Thousands)

(UNAUDITED)

Assets
Current assets:
Cash and cash-equivalents	$	253,845
Accounts receivable, net		462,532
Inventories, net		429,785
Other current assets		49,190
Total current assets		1,195,352
Long-term investments		24,795
Property, plant and equipment, net		156,381
Other assets, net		76,981
Goodwill, net		37,912
Total assets	$	1,491,421
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of capital lease obligations	$	401
Accounts payable		277,297
Accrued liabilities		52,150
Total current liabilities		329,848
Capital lease obligations, less current installments		10,709
Other long-term liabilities		31,916
Shareholders’ equity		1,118,948
Total liabilities and shareholders’ equity	$	1,491,421