Benchmark Electronics Reports Results For The Quarter Ended September 30, 2012

25 Oct, 2012, 07:00 ET from Benchmark Electronics, Inc.

ANGLETON, Texas, Oct. 25, 2012 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE), a leading integrated contract manufacturing provider, today announced financial results for the third quarter which ended September 30, 2012.

Third Quarter 2012 Results

                         Three Months Ended                    

September 30, 

June 30,

September 30,

2012

2012

2011

Net Sales (in millions) 

$611

$630

$570

Net Income (in millions)

$19

$14

$20*

Net Income – non-GAAP (in millions)

$18

$18

 $20*

Diluted EPS

$0.34

$0.24

$0.34*

Diluted EPS – non-GAAP 

$0.31

$0.32

$0.34*

Operating margin (%) 

4.1%

2.9%

2.0%

Operating margin – non-GAAP (%)  

3.7%

3.7%

2.1%

*Includes a discrete income tax benefit of $9 million ($0.16 per diluted share)

"Benchmark delivered another strong quarter of results, having achieved our revenue and operating margin targets," said Gayla Delly, the Company's President and CEO. "These results were accomplished through the strong performance of our global teams and our continued focus on customers even with the ongoing challenging macroeconomic environment. Looking ahead, given the continuing market uncertainty we will remain flexible and cautious with a continued commitment to growth, operational excellence, and our customers."

Third Quarter 2012 Highlights

  • Revenue of $611 million decreased 3% from Q2 of 2012 and increased 7% from Q3 of 2011.
  • Non-GAAP diluted earnings per share of $0.31 decreased 3% from Q2 of 2012 and 9% from Q3 of 2011.
  • Operating margin for the third quarter was 3.7% excluding restructuring and Thailand flood related charges.
  • Thailand flood insurance recoveries of $35 million included $12 million for property, plant and equipment losses and $23 million for inventory losses.  The claims and recovery process with our insurance carriers is ongoing.
  • Thailand flood related charges consist of $1 million of costs directly attributable to the Thailand flood offset by $4 million of insurance recoveries in excess of previously recognized inventory and property, plant and equipment losses.
  • Cash flows provided by operating activities for Q3 2012 were approximately $53 million, including $23 million of Thailand flood insurance recoveries for inventory losses.
  • Cash and long-term investments balance was $340 million at September 30, 2012. Long-term investments consist of $14 million of auction rate securities.
  • Accounts receivable was $455 million at September 30, 2012; calculated days sales outstanding were 67 days compared to 65 days at June 30, 2012 and 73 days at September 30, 2011.
  • Inventory was $375 million at September 30, 2012; inventory turns were 6.0 times compared to 6.0 at June 30, 2012 and 5.0 at September 30, 2011.
  • Repurchases of common shares for the third quarter totaled $8.1 million or 0.6 million shares.

Third Quarter Industry Sector Update

The following table sets forth revenue by industry sector for the quarters ended September 30, 2012, June 30, 2012 and September 30, 2011.

September 30,

June 30,

September 30,

2012

2012

2011

Computers and related products

  for business enterprises          

30%

31%

28%

Industrial control equipment         

27%

26%

29%

Telecommunications equipment        

28%

25%

27%

Medical devices             

10%

10%

9%

Testing and instrumentation products               

5%

8%

7%

Fourth Quarter 2012 Outlook

  • Revenue between $580 and $610 million
  • Diluted earnings per share between $0.26 and $0.31 (excluding restructuring and Thailand flood related charges)

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 statement "looking ahead, given the continuing market uncertainty we will remain flexible and cautious with a continued commitment to growth, operational excellence, and our customers", our sales and diluted earnings per share (excluding special items) guidance for the fourth quarter of 2012, 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

Nine Months Ended

September 30,

September 30,

2012

2011

2012

2011

Income from operations (GAAP)

$

24,882

$

11,616

$

50,975

$

41,563

Restructuring charges

523

145

773

625

Thailand flood related charges, net of insurance

(3,078)

11,798

Non-GAAP income from operations

$

22,327

$

11,761

$

63,546

$

42,188

Net income (GAAP)

$

19,314

$

19,867

$

38,492

$

49,081

Restructuring charges, net of tax

422

115

583

592

Thailand flood related charges, net of insurance and tax

 

(2,195)

 

 

11,180

 

Non-GAAP net income

$

17,541

$

19,982

$

50,255

$

49,673

Earnings per share: (GAAP)

    Basic

$

0.35

$

0.34

$

0.68

$

0.82

    Diluted

$

0.34

$

0.34

$

0.67

$

0.81

Earnings per share: (Non-GAAP)

    Basic

$

0.31

$

0.34

$

0.89

$

0.83

    Diluted

$

0.31

$

0.34

$

0.88

$

0.82

Weighted average shares used in calculating

     earnings per share:

    Basic

55,814

58,615

56,750

59,889

    Diluted

56,028

58,879

57,054

60,391

 

Benchmark Electronics, Inc. and Subsidiaries

Consolidated Statements of Income

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2012

2011

2012

2011

Net sales

$

610,769

$

570,083

$

1,834,217

$

1,693,944

Cost of sales

565,989

535,448

1,702,938

1,583,934

Gross profit

44,780

34,635

131,279

110,010

Selling, general and administrative expenses

22,453

22,874

67,733

67,822

Restructuring charges

523

145

773

625

Thailand flood related charges, net of insurance

(3,078)

11,798

Income from operations

24,882

11,616

50,975

41,563

Other income (expense):

Interest income

326

446

935

1,293

Interest expense

(443)

(334)

(1,090)

(997)

Other

178

(202)

96

94

Total other income (expense), net

61

(90)

(59)

390

Income before income taxes

24,943

11,526

50,916

41,953

Income tax expense (benefit)

5,629

(8,341)

12,424

(7,128)

Net income

$

19,314

$

19,867

$

38,492

$

49,081

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

 

 

55,814

 

 

58,615

 

 

56,750

 

 

59,889

Incremental common shares attributable to restricted shares and the exercise of outstanding equity instruments

 

 

214

 

 

264

 

 

304

 

 

502

Denominator for diluted earnings per share

56,028

58,879

57,054

60,391

 

Earnings per share:

           Basic

$

0.35

$

0.34

$

0.68

$

0.82

           Diluted

$

0.34

$

0.34

$

0.67

$

0.81

 

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet

September 30, 2012

(Amounts in Thousands)

(UNAUDITED)

Assets

Current assets:

Cash and cash-equivalents

$

325,778

Accounts receivable, net

455,333

Inventories, net

375,458

Other current assets

47,016

Total current assets

1,203,585

Long-term investments

13,999

Property, plant and equipment, net

174,583

Other assets, net

67,263

Goodwill, net

37,912

Total assets

$

1,497,342

Liabilities and Shareholders' Equity

Current liabilities:

Current installments of capital lease obligations

$

478

Accounts payable

269,823

Accrued liabilities

64,301

Total current liabilities

334,602

Capital lease obligations, less current installments

10,231

Other long-term liabilities

20,903

Shareholders' equity

1,131,606

Total liabilities and shareholders' equity

$

1,497,342

SOURCE Benchmark Electronics, Inc.



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