Benchmark Electronics Reports Results For The Quarter Ended September 30, 2013

Oct 24, 2013, 07:00 ET from Benchmark Electronics, Inc.

ANGLETON, Texas, Oct. 24, 2013 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE), a leading integrated contract manufacturing provider, today announced financial results for the third quarter which ended September 30, 2013.

Three Months Ended

September 30,

June 30,

September 30,

2013

2013

2012

Net sales (in millions)

$600

$608

$611

Net income (in millions)

$24

$8

$19

Net income – non-GAAP (in millions)

$17

$17

$18

Diluted EPS

$0.43

$0.16

$0.34

Diluted EPS – non-GAAP

$0.31

$0.31

$0.31

Operating margin (%)

4.9%

2.1%

4.1%

Operating margin – non-GAAP (%)

3.5%

3.5%

3.7%

"We are pleased with the results for the quarter with revenues and earnings in line with our expectations," said President and CEO Gayla J. Delly. "In the third quarter, we experienced revenue growth in three of our five industries that we serve and expect growth in all industry sectors next quarter. Expected strong fourth quarter revenue growth is reflective of the new program ramps and are further diversified with revenue contribution from our recent acquisitions."

Third Quarter 2013 Highlights

  • Revenue of $600 million decreased slightly from Q2 2013.
  • Top customer represented 15% of revenue.
  • New program bookings in Q3 2013 were $145 million to $170 million.
  • Restructuring and integration and acquisition-related costs totaled $1 million.
  • Cash flows provided by operating activities for Q3 2013 were approximately $39 million, which included approximately $10 million of Thailand flood insurance recoveries. The recovery process with our insurance carriers is ongoing.
  • Cash and long-term investments balance was $437 million at September 30, 2013.
  • Accounts receivable was $424 million at September 30, 2013; calculated days sales outstanding were 64 days compared to 69 days at June 30, 2013 and 67 days at September 30, 2012.
  • Inventory was $395 million at September 30, 2013; inventory turns were 5.6 times compared to 6.4 at June 30, 2013 and 6.0 at September 30, 2012.
  • Repurchases of common shares for the third quarter totaled $9 million or 431 thousand shares.
  • Operating margins of 3.5% were maintained despite late quarter order reductions and headwinds associated with new product ramps.

Subsequent Events

We acquired the EMS segment of CTS Corporation for $75 million. The acquired business has a footprint of five locations (4 in North America and 1 in Asia).

Third Quarter Industry Sector Update

The following table sets forth revenue by industry sector for the quarters ended September 30, 2013, June 30, 2013 and September 30, 2012.

September 30,

June 30,

September 30,

2013

2013

2012

Computers and related products for business

enterprises

30%

29%

30%

Industrial control equipment

31

30

27

Telecommunication equipment

20

23

28

Medical devices

12

12

10

Testing and instrumentation products

7

6

5

100%

100%

100%

Fourth Quarter 2013 Outlook

  • Revenue between $685 and $715 million.
  • Diluted earnings per share between $0.34 and $0.38 (excluding restructuring, acquisition and Thailand flood related items).

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 facilities in seven 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 "expected strong fourth quarter revenue growth is reflective of the new program ramps and are further diversified with revenue contribution from our recent acquisitions", our sales and diluted earnings per share (excluding special items) guidance for the fourth 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, 2012, 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,

2013

2012

2013

2012

Income from operations (GAAP)

$

29,473

$

24,882

$

56,249

$

50,975

Restructuring charges and integration

   and acquisition-related costs

1,214

523

7,323

773

Asset impairment charge and other

-

-

2,606

-

Thailand flood related items

(9,748)

(3,078)

(9,748)

11,798

Non-GAAP income from operations

$

20,939

$

22,327

$

56,430

$

63,546

Net income (GAAP)

$

23,726

$

19,314

$

43,670

$

38,492

Restructuring charges and integration

  and acquisition-related costs, net of tax

1,002

422

6,947

583

Asset impairment charge and other, net of tax

-

-

2,849

-

Thailand flood related items, net of tax

(7,817)

(2,195)

(7,817)

11,180

Non-GAAP net income

$

16,911

$

17,541

$

45,649

$

50,255

Earnings per share: (GAAP)

Basic

$

0.44

$

0.35

$

0.80

$

0.68

Diluted

$

0.43

$

0.34

$

0.80

$

0.67

Earnings per share: (Non-GAAP)

Basic

$

0.31

$

0.31

$

0.84

$

0.89

Diluted

$

0.31

$

0.31

$

0.83

$

0.88

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

Basic

54,087

55,814

54,361

56,750

Diluted

54,611

56,028

54,868

57,054

 

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,

2013

2012

2013

2012

Sales

$

599,658

$

610,769

$

1,749,624

$

1,834,217

Cost of sales

554,218

565,989

1,622,983

1,702,938

Gross profit

45,440

44,780

126,641

131,279

Selling, general and administrative expenses

24,501

22,453

70,211

67,733

Restructuring charges and integration

   and acquisition-related costs

1,214

523

7,323

773

Asset impairment charge and other

-

-

2,606

-

Thailand flood related items, net of insurance

(9,748)

(3,078)

(9,748)

11,798

Income from operations

29,473

24,882

56,249

50,975

Interest expense

(481)

(443)

(1,403)

(1,090)

Interest income

292

326

997

935

Other income, net

745

178

560

96

Income before income taxes

30,029

24,943

56,403

50,916

Income tax expense

6,303

5,629

12,733

12,424

Net income

$

23,726

$

19,314

$

43,670

$

38,492

Earnings per share:

Basic

$

0.44

$

0.35

$

0.80

$

0.68

Diluted

$

0.43

$

0.34

$

0.80

$

0.67

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

Basic

54,087

55,814

54,361

56,750

Diluted

54,611

56,028

54,868

57,054

 

Benchmark Electronics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

September 30,

December 31,

2013

2012

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

426,560

$

384,579

Accounts receivable, net

423,564

459,081

Inventories, net

394,977

324,041

Other current assets

43,225

46,490

Total current assets

1,288,326

1,214,191

Long-term investments

10,617

10,324

Property, plant and equipment, net

173,336

176,104

Goodwill, net

37,912

37,912

Other, net

53,377

62,946

Total assets

$

1,563,568

$

1,501,477

Liabilities and Shareholders' Equity

Current liabilities:

Current installments of capital lease obligations

$

560

$

497

Accounts payable

300,973

260,622

Accrued liabilities

62,141

69,396

Total current liabilities

363,674

330,515

Capital lease obligations, less current installments

9,672

10,103

Other long-term liabilities

22,469

21,334

Shareholders' equity

1,167,753

1,139,525

Total liabilities and shareholders' equity

$

1,563,568

$

1,501,477

 

SOURCE Benchmark Electronics, Inc.



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