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NYSEBHE
Benchmark Electronics Reports Results For The Quarter Ended March 31, 2014
PR Newswire
ANGLETON, Texas

ANGLETON, Texas, April 24, 2014 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE), a leading integrated contract manufacturing provider, today announced financial results for its first quarter.




Three Months Ended





March 31,



December 31,



March 31,




2014



2013



2013


Net sales (in millions)


$639



$757



$542


Net income (in millions)


$19



$67



$11


Net income – non-GAAP (in millions)


$19



$24



$12


Diluted EPS


$0.35



$1.24



$0.21


Diluted EPS – non-GAAP


$0.35



$0.43



$0.22


Operating margin (%)


3.5

%


8.0

%


2.6

%

Operating margin – non-GAAP (%)


3.6

%


4.1

%


2.7

%

 

"Benchmark again delivered strong performance, which allowed us to exceed our earnings expectations in the first quarter," noted Gayla J. Delly, President and CEO. "Our focus on growth opportunities in the non‐traditional market sectors, coupled with operational excellence and enhanced customer solutions, resulted in improved year‐over‐year revenue and operating margins. Our strategy is delivering results and we expect to continue to expand margins and drive additional improvements throughout the year."

First Quarter 2014 Highlights

  • Revenue of $639 million increased 18% from Q1 2013.
  • New program bookings in Q1 2014 were $135 million to $165 million.
  • Restructuring and integration and acquisition-related costs totaled $2.1 million.
  • Thailand flood related items include insurance recoveries of $1.6 million. The recovery process with our insurance carriers is complete.
  • Cash flows provided by operating activities for Q1 2014 were approximately $61 million.
  • Cash and cash equivalents balance was $394 million at March 31, 2014.
  • Accounts receivable was $465 million at March 31, 2014; calculated days sales outstanding were 65 days compared to 67 days at December 31, 2013 and 69 days at March 31, 2013.
  • Inventory was $443 million at March 31, 2014; inventory turns were 5.3 times compared to 7.0 at December 31, 2013 and 6.3 at March 31, 2013. Inventory increased in the first quarter to support new program ramps.
  • Repurchases of common shares for the first quarter totaled $5 million or 196,000 shares.
  • Non-GAAP operating margin for the first quarter was 3.6%.
  • Income tax expense for Q1 2014 includes a $1.2 million discrete tax benefit ($0.02 per diluted share) as a result of a 2013 tax rate incentive received in China during the first quarter.

First Quarter Industry Sector Update
The following table sets forth revenue by industry sector for the quarters ended March 31, 2014, December 31, 2013 and March 31, 2013.



March 31,


December 31,


March 31,




2014


2013


2013


Computers and related products for business







  enterprises

20

%

32

%

25

%

Industrial control equipment

29


26


29


Telecommunication equipment

27


24


26


Medical devices

11


10


13


Testing and instrumentation products

13


8


7




100

%

100

%

100

%

 

Second Quarter 2014 Outlook

  • Revenue between $665 and $700 million.
  • Diluted earnings per share between $0.35 and $0.40 (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. 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 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 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 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 of such expressions, are intended to identify forward-looking statements. Our forward-looking statements may be deemed to include, among other things, the statement "our strategy is delivering results and we expect to continue to expand margins and drive additional improvements throughout the year", our sales and diluted earnings per share (excluding special items) guidance for the second 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 any such forward-looking 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




March 31,


December 31,


March 31,




2014


2013


2013









Income from operations (GAAP)

$

22,432

$

60,275

$

13,993

Restructuring charges and integration







 and acquisition-related costs


2,109


2,025


442

Thailand flood related items, net of insurance


(1,571)


(31,577)


-

Non-GAAP income from operations

$

22,970

$

30,723

$

14,435

































Net income (GAAP)

$

19,125

$

67,489

$

11,487

Restructuring charges and integration and







 acquisition-related costs, net of tax


1,383


1,343


399

Thailand flood related items, net of insurance and tax


(1,263)


(27,810)


-

Discrete US tax benefit


-


(17,500)


-

Non-GAAP net income

$

19,245

$

23,522

$

11,886

















Earnings per share: (GAAP)








Basic

$

0.36

$

1.26

$

0.21


Diluted

$

0.35

$

1.24

$

0.21









Earnings per share: (Non-GAAP)








Basic

$

0.36

$

0.44

$

0.22


Diluted

$

0.35

$

0.43

$

0.22









Weighted-average number of shares used







 in calculating earnings per share:








Basic


53,650


53,773


54,796


Diluted


54,277


54,327


55,150

 

 


Benchmark Electronics, Inc. and Subsidiaries







Consolidated Statements of Income

(Amounts in Thousands, Except Per Share Data)

(UNAUDITED)





Three Months Ended




March 31,



2014


2013

Sales

$

639,344

$

542,444

Cost of sales


588,221


505,610


Gross profit


51,123


36,834

Selling, general and administrative expenses


28,153


22,399

Restructuring charges and integration and acquisition-related costs


2,109


442

Thailand flood related items, net of insurance


(1,571)


-


Income from operations


22,432


13,993

Interest expense


(476)


(459)

Interest income


515


414

Other income, net


26


316


Income before income taxes


22,497


14,264

Income tax expense


3,372


2,777


Net income

$

19,125

$

11,487







Earnings per share:






Basic

$

0.36

$

0.21


Diluted

$

0.35

$

0.21







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






Basic


53,650


54,796


Diluted


54,277


55,150

 

 

Benchmark Electronics, Inc. and Subsidiaries










Condensed Consolidated Balance Sheets

(in thousands)







March 31,


December 31,







2014


2013







(unaudited)



Assets






Current assets:







Cash and cash equivalents

$

394,194

$

345,555



Accounts receivable, net


464,999


559,763



Inventories, net


443,203


396,699



Other current assets


40,222


40,816





Total current assets


1,342,618


1,342,833


Long-term investments


9,906


9,921


Property, plant and equipment, net


187,689


185,319


Goodwill and other, net


117,678


119,298





Total assets

$

1,657,891

$

1,657,371










Liabilities and Shareholders' Equity






Current liabilities:







Current installments of capital lease obligations

$

605

$

582



Accounts payable


299,715


320,953



Accrued liabilities


75,861


76,842





Total current liabilities


376,181


398,377


Capital lease obligations, less current installments


9,366


9,521


Other long-term liabilities


23,670


22,440


Shareholders' equity


1,248,674


1,227,033





Total liabilities and shareholders' equity

$

1,657,891

$

1,657,371

 

 

SOURCE Benchmark Electronics, Inc.

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