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NYSEBHE
Benchmark Electronics Reports Results for the Quarter and Year Ended December 31, 2008
PRNewswire-FirstCall
ANGLETON, Texas

Benchmark Electronics, Inc. , a leading contract manufacturing provider, announced sales of $582 million for the quarter ended December 31, 2008, compared to $735 million for the same quarter in the prior year. The Company reported a fourth quarter 2008 net loss of $204 million, or $3.13 per diluted share. In the comparable period of 2007, net income was $21 million, or $0.29 per diluted share.

During the fourth quarter of 2008, the Company recorded a non-cash goodwill impairment charge of $247 million ($219 million, net of tax). The Company's annual goodwill impairment analysis indicated there was an impairment of goodwill in two of its reporting segments, the Americas and Europe, primarily due to a decline in the Company's market capitalization and recent market turmoil. The impairment charge did not result in any cash expenditures and did not affect the Company's cash position, cash flows from operating activities or availability under its credit facility.

Excluding goodwill impairment and restructuring charges, the Company would have reported net income of $17 million, or $0.27 per diluted share, in the fourth quarter of 2008. Excluding restructuring charges and integration costs, the Company would have reported net income of $24 million, or $0.33 per diluted share, in the fourth quarter of 2007.

Sales for the year ended December 31, 2008 were $2.6 billion, compared to $2.9 billion in 2007. The net loss for the year ended December 31, 2008 was $136 million, or $2.02 per diluted share. In the prior year, net income was $93 million, or $1.27 per diluted share.

Excluding goodwill impairment, restructuring charges and a discrete tax benefit related to a previously closed facility, the Company would have reported net income of $82 million, or $1.22 per diluted share, in 2008. Excluding restructuring charges, integration costs and a discrete tax benefit related to a previously closed facility, the Company would have reported net income of $94 million, or $1.29 per diluted share, in 2007.

"The deterioration in end markets which began earlier in the year accelerated in the fourth quarter," said Cary T. Fu, the Company's Chief Executive Officer. "While 2009 will present significant challenges and uncertainties, we are confident that our customer centric business model, our focus on cost controls and our strong cash position will keep us in an excellent competitive position to manage through this downturn and subsequently benefit from its recovery."

  Fourth Quarter 2008 Financial Highlights
  --  Operating margin, excluding goodwill impairment and restructuring
      charges for the fourth quarter was 3.1%.
  --  Cash flows provided by operating activities for the fourth quarter
      were approximately $39 million and for the year were approximately
      $164 million.
  --  Cash and long-term investments totaled $408 million at December 31,
      2008. Long-term investments consist of $48 million of auction rate
      securities.
  --  Accounts receivable was $422 million at December 31, 2008; calculated
      days sales outstanding were 65 days.
  --  Inventory was $343 million at December 31, 2008; inventory turns were
      6.3 times.
  --  Repurchases of common shares for the fourth quarter totaled $7 million
      or 0.6 million shares.


  First Quarter 2009 Outlook

Sales for the first quarter of 2009 are expected to range from $525 million to $570 million. Diluted earnings per share for the first quarter, excluding restructuring charges, are expected to be between $0.16 and $0.26.

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 (loss) and earnings (loss) 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 (loss) 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 that "while 2009 will present significant challenges and uncertainties, we are confident that our customer centric business model, our focus on cost controls and our strong cash position will keep us in an excellent competitive position to manage through this downturn and subsequently benefit from its recovery" and our sales and diluted earnings per share, excluding restructuring charges, guidance for the first quarter of 2009, 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 industry and economic conditions, and customer actions.

All forward-looking statements included in this release are based upon information available to Benchmark as of the date of the release, and Benchmark assumes no obligation to update any such forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Persons are advised to consult further disclosures on related subjects in Benchmark's Form 10-K for the year ended December 31, 2007, in its other filings with the Securities and Exchange Commission and in its press releases.

Additional Information

Benchmark Electronics, Inc. provides electronics manufacturing, design and engineering services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment, testing and instrumentation products, and telecommunication equipment. Benchmark's global operations include 20 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. 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           Year Ended
                               December 31,               December 31,
                            2008         2007         2008         2007

  Income (loss) from
   operations (GAAP)   $(231,924)     $21,326    $(166,480)     $90,299
  Goodwill impairment    247,482            -      247,482            -
  Restructuring charges
   and integration costs   2,527        4,580        2,780       11,581
  Non-GAAP income from
   operations            $18,085      $25,906      $83,782     $101,880

  Net income (loss)
   (GAAP)              $(203,738)     $20,629    $(135,632)     $92,356
  Goodwill impairment,
   net of tax            218,904            -      218,904            -
  Restructuring charges
   and integration costs,
   net of tax              2,266        3,080        2,494        8,291
  Income tax benefit           -            -       (3,440)      (6,481)
  Non-GAAP net income    $17,432      $23,709      $82,326      $94,166

  Numerator for basic
   earnings (loss) per
   share - net income
   (loss) (GAAP)       $(203,738)     $20,629    $(135,632)     $92,356
  Interest expense on
   convertible debt,
   net of tax                  -            -            -          147
  Numerator for diluted
   earnings (loss) per
   share (GAAP)        $(203,738)     $20,629    $(135,632)     $92,503

  Diluted Earnings
   (loss) per
   share (GAAP)           $(3.13)       $0.29       $(2.02)       $1.27
  Numerator for basic
   earnings per
   share - net income
   (Non-GAAP)            $17,432      $23,709      $82,326      $94,166
  Interest expense on
   convertible debt,
   net of tax                  -            -            -          147
  Numerator for diluted
   earnings per share
   (Non-GAAP)            $17,432      $23,709      $82,326      $94,313

  Diluted earnings per
   share (Non-GAAP)        $0.27        $0.33        $1.22        $1.29

  Weighted average shares
   used in calculating
   earnings (loss) per
   share:
    Diluted - GAAP        65,173       71,555       67,060       72,829
    Diluted - Non-GAAP    65,406       71,555       67,528       72,829






                  Benchmark Electronics, Inc. and Subsidiaries

                     Consolidated Statements of Income (Loss)
                   (Amounts in Thousands, Except Per Share Data)
                                     (UNAUDITED)

                             Three Months Ended            Year Ended
                                December 31,               December 31,

                              2008       2007           2008          2007

  Net sales               $581,770   $734,547     $2,590,167    $2,915,919
  Cost of sales            540,989    683,490      2,414,231     2,717,425

      Gross profit          40,781     51,057        175,936       198,494

  Selling, general and
   administrative expenses  22,254     24,704         90,372        94,826
  Amortization of
   intangibles                 442        447          1,782         1,788
  Goodwill impairment      247,482          -        247,482             -
  Restructuring charges
   and integration costs     2,527      4,580          2,780        11,581

      Income (loss) from
       operations         (231,924)    21,326       (166,480)       90,299

  Other income
   (expense):
    Interest income          1,766      3,662          8,675        11,217
    Interest expense          (353)      (397)        (1,455)       (2,183)
    Other income (expense)     224       (885)         1,772           693
  Total other income, net    1,637      2,380          8,992         9,727

      Income (loss) before
       income taxes       (230,287)    23,706       (157,488)      100,026

  Income tax benefit
   (expense)                26,549     (3,077)        21,856        (7,670)

      Net income (loss)  $(203,738)   $20,629      $(135,632)      $92,356

  Numerator for basic
   earnings (loss) per
   share - net income
   (loss)                $(203,738)   $20,629      $(135,632)      $92,356
  Interest expense on
   convertible debt, net
   of tax                        -          -              -           147
  Numerator for diluted
   earnings (loss) per
   share                 $(203,738)   $20,629      $(135,632)      $92,503

  Denominator for basic
   earnings per
   share - weighted
   average number of
   common shares outstanding
   during the period        65,173     71,309         67,060        72,061
  Incremental common shares
   attributable to restricted
   shares and the exercise of
   outstanding equity
   instruments                   -        246              -           768
  Denominator for diluted
   earnings (loss) per
   share                    65,173     71,555         67,060        72,829

  Earnings (loss) per share:
      Basic                 $(3.13)     $0.29         $(2.02)        $1.28
      Diluted               $(3.13)     $0.29         $(2.02)        $1.27


  The results for the three months and year ended December 31, 2007, as
  well as the year ended December 31, 2008, reflect an immaterial
  correction of the Company's prior period financial statements related to
  stock-based compensation expense.




                    Benchmark Electronics, Inc. and Subsidiaries

                        Condensed Consolidated Balance Sheet
                                 December 31, 2008
                              (Amounts in Thousands)
                                     (UNAUDITED)

  Assets

  Current assets:
    Cash and cash-equivalents                                   $359,694
    Accounts receivable, net                                     422,058
    Inventories, net                                             343,163
    Other current assets                                          39,466

      Total current assets                                     1,164,381

  Long-term investments                                           48,162
  Non-current deferred tax asset                                  21,487
  Property, plant and equipment, net                             142,844
  Other assets, net                                               24,398
  Goodwill, net                                                   37,912

      Total assets                                            $1,439,184


  Liabilities and Shareholders' Equity

  Current liabilities:
    Current installments of capital lease obligations               $256
    Accounts payable                                             288,045
    Accrued liabilities                                           54,219

      Total current liabilities                                  342,520

  Capital lease obligations, less current installments            11,683
  Other long-term liabilities                                     29,252
  Shareholders' equity                                         1,055,729

      Total liabilities and shareholders' equity              $1,439,184

First Call Analyst:
FCMN Contact: james.walker@bench.com

SOURCE: Benchmark Electronics, Inc.

CONTACT: Donald F. Adam, Chief Financial Officer of Benchmark
Electronics, Inc., +1-979-849-6550

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