Benchmark Electronics Reports Results for the Quarter and Year Ended December 31, 2012

Feb 04, 2013, 07:00 ET from Benchmark Electronics, Inc.

ANGLETON, Texas, Feb. 4, 2013 /PRNewswire/ -- 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, 2012.

Three Months Ended

December 31,

September 30,

December 31,

2012

2012

2011

Net sales (in millions)

$634

$611

$559

Net income (in millions)

$18

$19

$3

Net income – non-GAAP (in millions)

$18

$18

$10

Diluted EPS

$0.33

$0.34

$0.05

Diluted EPS – non-GAAP

$0.33

$0.31

$0.17

Operating margin (%)

3.9

%

4.1

%

-

%

Operating margin – non-GAAP (%)

3.7

%

3.7

%

1.2

%

Year Ended

December 31,

2012

2011

Net sales (in millions)

$2,468

$2,253

Net income (in millions)

$57

$52

Net income – non-GAAP (in millions)

$68

$60

Diluted EPS

$1.00

$0.87

Diluted EPS - non-GAAP

$1.21

$1.00

Operating margin (%)

3.1

%

1.8

%

Operating margin – non-GAAP (%)

3.5

%

2.2

%

"Our results for the fourth quarter and full year 2012 finished a very successful year for Benchmark," said Gayla J. Delly, the Company's President and CEO. "Our teams executed well in a weak environment, delivering strong revenue and earnings growth and solid cash flow generation. We are well-prepared to meet the macroeconomic challenges in 2013 as we continue to focus on operational excellence and cost-effective solutions for our customers."

Fourth Quarter 2012 Highlights

  • Revenue of $634 million increased 4% from Q3 of 2012 and increased 13% from Q4 of 2011.
  • Non-GAAP diluted earnings per share of $0.33 increased 6% from Q3 of 2012 and 94% from Q4 of 2011.
  • Operating margin for the fourth quarter was 3.7% excluding restructuring and Thailand flood related charges.
  • Thailand flood related charges included $3 million of insurance recoveries in excess of previously recognized inventory and property, plant and equipment losses offset by costs directly attributable to the Thailand flood. Thailand flood insurance recoveries included $1 million for property, plant and equipment losses and $2 million for inventory losses. The claims and recovery process with our insurance carriers is ongoing.
  • Cash flows provided by operating activities for Q4 2012 were approximately $77 million, including $2 million of Thailand flood insurance recoveries for inventory losses.
  • Cash and long-term investments balance was $395 million at December 31, 2012. Long-term investments consist of $10 million of auction rate securities.
  • Accounts receivable was $459 million at December 31, 2012; calculated days sales outstanding were 65 days compared to 67 days at September 30, 2012 and 69 days at December 31, 2011.
  • Inventory was $324 million at December 31, 2012; inventory turns were 7.3 times compared to 6.0 at September 30, 2012 and 5.4 at December 31, 2011.
  • Repurchases of common shares for the fourth quarter totaled $16 million or 1 million shares.

Fourth Quarter Industry Sector Update The following table sets forth revenue by industry sector for the quarters ended December 31, 2012, September 30, 2012 and December 31, 2011.

December 31,

September 30,

December 31,

2012

2012

2011

Computers and related products for business enterprises

33

%

30

%

34

%

Industrial control equipment

27

27

29

Telecommunication equipment

25

28

20

Medical devices

10

10

9

Testing and instrumentation products

5

5

8

100

%

100

%

100

%

First Quarter 2013 Outlook

  • A strong pull-through of orders in the fourth quarter of 2012 to support customer requirements has contributed to a reduced revenue outlook in the first quarter of 2013.
  • Revenue between $530 and $560 million.
  • Diluted earnings per share between $0.17 and $0.21 (excluding restructuring and Thailand flood related items).

Ms. Delly continued: "We believe the increased orders in the fourth quarter contribute to our softer revenue expectations for the first quarter. However, with robust recent bookings, we anticipate rebounding our revenue in 2013 despite the current market headwinds."

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 21 facilities in nine countries. Benchmark's Common Shares trade on the New York Stock Exchange under the symbol BHE.

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 are well-prepared to meet the macroeconomic challenges in 2013 as we continue to focus on operational excellence and cost-effective solutions for our customers" and "we anticipate rebounding our revenue in 2013 despite the current market headwinds", our sales and diluted earnings per share (excluding special items) guidance for the first quarter of 2013, 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, 2011, in its other filings with the Securities and Exchange Commission and in its press releases.

Benchmark Electronics, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Results

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

Three months ended

Year ended

 December 31,

 December 31,

2012

2011

2012

2011

Income (loss) from operations (GAAP)

$

24,584

$

(270)

$

75,559

$

41,293

Restructuring charges

1,427

3,890

2,200

4,515

Thailand flood related charges, net of insurance

(2,770)

3,362

9,028

3,362

Non-GAAP income from operations

$

23,241

$

6,982

$

86,787

$

49,170

Net income (GAAP)

$

18,115

$

2,878

$

56,607

$

51,959

Restructuring charges, net of tax

1,249

3,840

1,833

4,442

Thailand flood related charges, net of insurance and tax

(1,319)

3,202

9,862

3,202

Non-GAAP net income

$

18,045

$

9,920

$

68,302

$

59,603

Earnings per share: (GAAP)

Basic

$

0.33

$

0.05

$

1.01

$

0.88

Diluted

$

0.33

$

0.05

$

1.00

$

0.87

Earnings per share: (Non-GAAP)

Basic

$

0.33

$

0.17

$

1.21

$

1.01

Diluted

$

0.33

$

0.17

$

1.21

$

1.00

Weighted-average number of shares used in calculating earnings per share:

Basic

55,038

57,488

56,320

59,284

Diluted

55,256

57,720

56,634

59,773

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,

2012

2011

2012

2011

Sales

$

633,933

$

559,086

$

2,468,150

$

2,253,030

Cost of sales

588,474

530,261

2,291,412

2,114,195

Gross profit

45,459

28,825

176,738

138,835

Selling, general and administrative expenses

22,218

21,843

89,951

89,665

Restructuring charges

1,427

3,890

2,200

4,515

Thailand flood related charges, net of insurance

(2,770)

3,362

9,028

3,362

Income (loss) from operations

24,584

(270)

75,559

41,293

Interest expense

(490)

(330)

(1,580)

(1,327)

Interest income

371

475

1,306

1,768

Other income (expense)

58

(696)

154

(602)

Income (loss) before income taxes

24,523

(821)

75,439

41,132

Income tax expense (benefit)

6,408

(3,699)

18,832

(10,827)

Net income

$

18,115

$

2,878

$

56,607

$

51,959

Earnings per share:

Basic

$

0.33

$

0.05

$

1.01

$

0.88

Diluted

$

0.33

$

0.05

$

1.00

$

0.87

Weighted-average number of shares used in calculating earnings per share:

Basic

55,038

57,488

56,320

59,284

Diluted

55,256

57,720

56,634

59,773

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

December 31, 2012

(in thousands, except par value)

(UNAUDITED)

Assets

Current assets:

Cash and cash equivalents

$

384,579

Accounts receivable, net

459,081

Inventories, net

324,041

Other current assets

46,490

Total current assets

1,214,191

Long-term investments

10,324

Property, plant and equipment, net

176,104

Goodwill, net

37,912

Other, net

62,946

Total assets

$

1,501,477

Liabilities and Shareholders' Equity

Current liabilities:

Current installments of capital lease obligations

$

497

Accounts payable

260,622

Accrued liabilities

69,396

Total current liabilities

330,515

Capital lease obligations, less current installments

10,103

Other long-term liabilities

21,334

Shareholders' equity

1,139,525

Total liabilities and shareholders' equity

$

1,501,477

SOURCE Benchmark Electronics, Inc.



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