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8-K - FORM 8-K - BENCHMARK ELECTRONICS INC8-k.htm
EX-99.2 - EX 99.2 - BENCHMARK ELECTRONICS INCex99-2.htm

 

Exhibit 99.1

FOR IMMEDIATE RELEASE

 

BENCHMARK ELECTRONICS REPORTS RESULTS FOR THE

QUARTER ENDED JUNE 30, 2014

 

ANGLETON, TX, JULY 24, 2014 – Benchmark Electronics, Inc. (NYSE: BHE), a leading integrated contract manufacturing provider, today announced financial results for its second quarter.

 

  

  

  

Three Months Ended

  

  

  

  

June 30,

  

  

March 31,

  

  

June 30,

  

  

  

2014 

  

  

2014 

  

  

2013 

  

Net sales (in millions)

  

$717

  

  

$639

  

  

$608

  

Net income (in millions)

  

$22

  

  

$19

  

  

$8

  

Net income – non-GAAP (in millions)

  

$23

  

  

$19

  

  

$17

  

Diluted EPS

  

$0.41

  

  

$0.35

  

  

$0.16

  

Diluted EPS – non-GAAP

  

$0.43

  

  

$0.35

  

  

$0.31

  

Operating margin (%)

  

 3.8 

%

  

 3.5 

%

  

 2.1 

%

Operating margin – non-GAAP (%)

  

 4.1 

%

  

 3.6 

%

  

 3.5 

%

 

“We executed very well during the quarter. Our continued focus on operational excellence enabled results for the second quarter to exceed our expectations as we convert our robust pipeline of new programs,” said Gayla J. Delly, President and CEO. “The solid quarter demonstrates the level of performance we can achieve at current demand levels and provides visibility into our future potential as we continue to accelerate our pace and efficiency in new program introductions.”

 

Second Quarter 2014 Highlights

·         Revenue of $717 million increased 12% from Q1 2014 and 18% from Q2 2013.

·         New program bookings were $120 million to $150 million.

·         Restructuring and integration and acquisition-related costs totaled $1.9 million.

·         Cash flows provided by operating activities were approximately $25 million.

·         Cash and cash equivalents balance was $402 million at June 30, 2014.

·         Accounts receivable was $499 million at June 30, 2014; calculated days sales outstanding were 63 days compared to 65 days at March 31, 2014 and 69 days at June 30, 2013.

·         Inventory was $421 million at June 30, 2014; inventory turns were 6.3 times compared to 5.3 at March 31, 2014 and 6.4 at June 30, 2013.

·         Repurchases of common shares totaled $7 million or 314,000 shares.

·         Non-GAAP operating margin was 4.1%.

 


 

 

Second Quarter Industry Sector Update

The following table sets forth revenue by industry sector for the referenced quarters.

 

  

  

June 30,

  

March 31,

  

June 30,

  

  

  

2014 

  

2014 

  

2013 

  

Computers and related products for business

  

  

  

  

  

  

  

enterprises

 21 

%

 20 

%

 29 

%

Industrial control equipment

 29 

  

 29 

  

 29 

  

Telecommunication equipment

 29 

  

 27 

  

 23 

  

Medical devices

 11 

  

 11 

  

 12 

  

Testing and instrumentation products

 10 

  

 13 

  

 7 

  

  

  

 100 

%

 100 

%

 100 

%

 

Third Quarter 2014 Outlook

·         Revenue between $670 and $700 million.

·         Diluted earnings per share between $0.38 and $0.42 (excluding restructuring charges and integration costs).

 

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, and its common shares trade on the New York Stock Exchange under the symbol BHE.

 

For More Information, Please Contact:

Lisa K. Weeks, VP of Strategy & Investor Relations

979-849-6550 (ext. 1361) or lisa.weeks@bench.com

 

Non-GAAP Financial Measures

This press release includes financial measures for earnings and earnings per share that exclude certain items and therefore do not follow U.S. 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 uses a non-GAAP measure of net income and earnings per share that excludes certain items to better assess operating


 

performance and to help investors compare our results with our previous guidance. This non-GAAP information 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 press 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 thereof, identify forward-looking statements. Our forward-looking statements may be deemed to include, among other things, the statement “provides visibility into our future potential as we continue to accelerate our pace and efficiency in new program introductions,” our sales and diluted earnings per share (excluding special items) guidance for the third quarter of 2014, 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. 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 such statements. Readers are advised to consult further disclosures on related subjects in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, 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

  

  

Six Months Ended

  

  

  

June 30,

  

March 31,

  

June 30,

  

  

June 30,

  

  

  

2014 

  

2014 

  

2013 

  

  

2014 

  

2013 

  

  

  

  

  

  

  

  

  

  

  

  

  

Income from operations (GAAP)

$

 27,144 

$

 22,432 

$

 12,783 

  

$

 49,576 

$

 26,776 

Restructuring charges and integration

  

  

  

  

  

  

  

  

  

  

  

   and acquisition-related costs

  

 1,907 

  

 2,109 

  

 5,667 

  

  

 4,016 

  

 6,109 

Asset impairment charge and other

  

 - 

  

 - 

  

 2,606 

  

  

 - 

  

 2,606 

Thailand flood related items, net of insurance

  

 - 

  

 (1,571) 

  

 - 

  

  

 (1,571) 

  

 - 

Non-GAAP income from operations

$

 29,051 

$

 22,970 

$

 21,056 

  

$

 52,021 

$

 35,491 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Net income (GAAP)

$

 22,150 

$

 19,125 

$

 8,457 

  

$

 41,275 

$

 19,944 

Restructuring charges and integration

  

  

  

  

  

  

  

  

  

  

  

   and acquisition-related costs, net of tax

  

 1,243 

  

 1,383 

  

 5,541 

  

  

 2,626 

  

 5,945 

Asset impairment charge and other,

  

  

  

  

  

  

  

  

  

  

  

   net of tax

  

 - 

  

 - 

  

 2,849 

  

  

 - 

  

 2,849 

Thailand flood related items, net of insurance

  

  

  

  

  

  

  

  

  

  

  

   and tax

  

 - 

  

 (1,263) 

  

 - 

  

  

 (1,263) 

  

 - 

Non-GAAP net income

$

 23,393 

$

 19,245 

$

 16,847 

  

$

 42,638 

$

 28,738 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Earnings per share: (GAAP)

  

  

  

  

  

  

  

  

  

  

  

  

Basic

$

 0.41 

$

 0.36 

$

 0.16 

  

$

 0.77 

$

 0.37 

  

Diluted

$

 0.41 

$

 0.35 

$

 0.16 

  

$

 0.76 

$

 0.36 

  

  

  

  

  

  

  

  

  

  

  

  

  

Earnings per share: (Non-GAAP)

  

  

  

  

  

  

  

  

  

  

  

  

Basic

$

 0.43 

$

 0.36 

$

 0.31 

  

$

 0.79 

$

 0.53 

  

Diluted

$

 0.43 

$

 0.35 

$

 0.31 

  

$

 0.78 

$

 0.52 

  

  

  

  

  

  

  

  

  

  

  

  

  

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

  

  

  

  

  

  

  

  

  

  

  

  

Basic

  

 53,826 

  

 53,650 

  

 54,207 

  

  

 53,738 

  

 54,500 

  

Diluted

  

 54,405 

  

 54,277 

  

 54,500 

  

  

 54,394 

  

 54,897 


 

 

Benchmark Electronics, Inc. and Subsidiaries

  

  

  

  

  

  

  

  

  

  

  

Consolidated Statements of Income

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)

  

  

  

  

Three Months Ended

  

  

Six Months Ended

  

  

  

June 30,

  

  

June 30,

  

  

2014 

  

2013 

  

  

2014 

  

2013 

Sales

$

 716,868 

$

 607,522 

  

$

 1,356,212 

$

 1,149,966 

Cost of sales

  

 659,117 

  

 563,155 

  

  

 1,247,338 

  

 1,068,765 

  

Gross profit

  

 57,751 

  

 44,367 

  

  

 108,874 

  

 81,201 

Selling, general and administrative expenses

  

 28,700 

  

 23,311 

  

  

 56,853 

  

 45,710 

Restructuring charges and integration

  

  

  

  

  

  

  

  

  

   and acquisition-related costs

  

 1,907 

  

 5,667 

  

  

 4,016 

  

 6,109 

Asset impairment charge and other

  

 - 

  

 2,606 

  

  

 - 

  

 2,606 

Thailand flood related items, net of insurance

  

 - 

  

 - 

  

  

 (1,571) 

  

 - 

  

Income from operations

  

 27,144 

  

 12,783 

  

  

 49,576 

  

 26,776 

Interest expense

  

 (473) 

  

 (463) 

  

  

 (949) 

  

 (922) 

Interest income

  

 668 

  

 291 

  

  

 1,183 

  

 705 

Other income (expense), net

  

 99 

  

 (501) 

  

  

 125 

  

 (185) 

  

Income before income taxes

  

 27,438 

  

 12,110 

  

  

 49,935 

  

 26,374 

Income tax expense

  

 5,288 

  

 3,653 

  

  

 8,660 

  

 6,430 

  

Net income

$

 22,150 

$

 8,457 

  

$

 41,275 

$

 19,944 

  

  

  

  

  

  

  

  

  

  

  

Earnings per share:

  

  

  

  

  

  

  

  

  

  

Basic

$

 0.41 

$

 0.16 

  

$

 0.77 

$

 0.37 

  

Diluted

$

 0.41 

$

 0.16 

  

$

 0.76 

$

 0.36 

  

  

  

  

  

  

  

  

  

  

  

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

  

  

  

  

  

  

  

  

  

  

Basic

  

 53,826 

  

 54,207 

  

  

 53,738 

  

 54,500 

  

Diluted

  

 54,405 

  

 54,500 

  

  

 54,394 

  

 54,897 


 

 

Benchmark Electronics, Inc. and Subsidiaries

  

  

  

  

  

  

  

  

  

Condensed Consolidated Balance Sheets

(in thousands)

  

  

  

  

  

  

June 30,

  

December 31,

  

  

  

  

  

  

2014 

  

2013 

  

  

  

  

  

  

(unaudited)

  

  

Assets

  

  

  

  

  

Current assets:

  

  

  

  

  

  

Cash and cash equivalents

$

 401,869 

$

 345,555 

  

  

Accounts receivable, net

  

 499,479 

  

 559,763 

  

  

Inventories, net

  

 421,216 

  

 396,699 

  

  

Other current assets

  

 42,667 

  

 40,816 

  

  

  

  

Total current assets

  

 1,365,231 

  

 1,342,833 

  

Long-term investments

  

 9,710 

  

 9,921 

  

Property, plant and equipment, net

  

 190,686 

  

 185,319 

  

Goodwill and other, net

  

 115,850 

  

 119,298 

  

  

  

  

Total assets

$

 1,681,477 

$

 1,657,371 

  

  

  

  

  

  

  

  

  

Liabilities and Shareholders’ Equity

  

  

  

  

  

Current liabilities:

  

  

  

  

  

  

Current installments of capital lease obligations

$

 628 

$

 582 

  

  

Accounts payable

  

 298,762 

  

 320,953 

  

  

Accrued liabilities

  

 78,284 

  

 76,842 

  

  

  

  

Total current liabilities

  

 377,674 

  

 398,377 

  

Capital lease obligations, less current installments

  

 9,194 

  

 9,521 

  

Other long-term liabilities

  

 23,751 

  

 22,440 

  

Shareholders’ equity

  

 1,270,858 

  

 1,227,033 

  

  

  

  

Total liabilities and shareholders’ equity

$

 1,681,477 

$

 1,657,371