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EX-99.2 - EXHIBIT 99.2 - BENCHMARK ELECTRONICS INCex99-2.htm

 

Exhibit 99.1

FOR IMMEDIATE RELEASE

 

BENCHMARK ELECTRONICS RESULTS EXCEEDS THIRD QUARTER GUIDANCE

 

ANGLETON, TX, OCTOBER 23, 2014 – Benchmark Electronics, Inc. (NYSE: BHE), a leading integrated contract manufacturing provider, today announced financial results for the quarter ending September 30, 2014.

 

  

  

  

Three Months Ended

  

  

  

  

Sep 30,

  

  

Jun 30,

  

  

Sep 30,

  

  

  

2014 

  

  

2014 

  

  

2013 

  

Net sales (in millions)

  

$731

  

  

$717

  

  

$600

  

Net income (in millions)

  

$17

  

  

$22

  

  

$24

  

Net income – non-GAAP (in millions)

  

$23

  

  

$23

  

  

$17

  

Diluted EPS

  

$0.32

  

  

$0.41

  

  

$0.43

  

Diluted EPS – non-GAAP

  

$0.43

  

  

$0.43

  

  

$0.31

  

Operating margin (%)

  

 3.0 

%

  

 3.8 

%

  

 4.9 

%

Operating margin – non-GAAP (%)

  

 4.0 

%

  

 4.1 

%

  

 3.5 

%

 

President and CEO Gayla J. Delly commented, “We are pleased with the solid performance of our teams during the third quarter as we have continued to support new program ramps and acquisition-integration activities. Additionally, the third quarter business development efforts provided strong bookings with significant production and engineering wins. Despite recent uncertainty in global markets, we are well positioned to execute our strategic plan and continue driving profitable growth.”

 

Third Quarter 2014 Highlights

·         Revenue of $731 million increased 2% from Q2 2014 and 22% from Q3 2013.

·         The Company incurred a $5 million charge ($0.09 per share) for the write-down of inventory and provisions to accounts receivable associated with the bankruptcy of GT Advanced Technologies. The charges increased cost of sales by $2 million and SG&A by $3 million.

·         New program bookings were $140 million to $160 million.

·         Restructuring and integration and acquisition-related costs totaled $2 million.

·         Cash flows provided by operating activities were approximately $28 million.

·         Cash and cash equivalents balance was $420 million at September 30, 2014.

·         Accounts receivable was $534 million at September 30, 2014; calculated days sales outstanding were 66 days compared to 63 days at June 30, 2014 and 64 days at September 30, 2013.

·         Inventory was $434 million at September 30, 2014; inventory turns were 6.2 times compared to 6.3 at June 30, 2014 and 5.6 at September 30, 2013.

·         Repurchases of common shares totaled $13 million or 545,000 shares.

·         Non-GAAP operating margin was  4.0%.


 

 

Third Quarter Industry Sector Update

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

 

  

  

Sep 30,

  

Jun 30,

  

Sep 30,

  

  

  

2014 

  

2014 

  

2013 

  

Computers and related products for business

  

  

  

  

  

  

  

enterprises

 21 

%

 21 

%

 30 

%

Industrial control equipment

 30 

  

 29 

  

 31 

  

Telecommunication equipment

 32 

  

 29 

  

 20 

  

Medical devices

 10 

  

 11 

  

 11 

  

Testing and instrumentation products

 7 

  

 10 

  

 8 

  

  

  

 100 

%

 100 

%

 100 

%

 

Fourth Quarter 2014 Outlook

·         Revenue between $710 and $740 million.

·         Diluted earnings per share between $0.41 and $0.45 (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 the Company’s 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 (including 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 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 results with our previous guidance. Our non-GAAP information is not necessarily comparable to non-GAAP information used by 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 “we are well positioned to execute our strategic plan and continue driving profitable growth,” our sales and diluted earnings per share (excluding special items) guidance for the fourth 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 these statements are based upon reasonable assumptions, they involve risks, uncertainties and assumptions. If one or more of these risks or uncertainties materialize, or 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 them. 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

  

  

Nine Months Ended

  

  

  

Sep 30,

  

Jun 30,

  

Sep 30,

  

  

September 30,

  

  

  

2014 

  

2014 

  

2013 

  

  

2014 

  

2013 

  

  

  

  

  

  

  

  

  

  

  

  

  

Income from operations (GAAP)

$

 21,915 

$

 27,144 

$

 29,473 

  

$

 71,491 

$

 56,249 

Restructuring charges and integration

  

  

  

  

  

  

  

  

  

  

  

   and acquisition-related costs

  

 2,160 

  

 1,907 

  

 1,214 

  

  

 6,176 

  

 7,323 

Asset impairment charge and other

  

 - 

  

 - 

  

 - 

  

  

 - 

  

 2,606 

Thailand flood related items, net of insurance

  

 - 

  

 - 

  

 (9,748) 

  

  

 (1,571) 

  

 (9,748) 

Customer bankruptcy

  

 5,029 

  

 - 

  

 - 

  

  

 5,029 

  

 - 

Non-GAAP income from operations

$

 29,104 

$

 29,051 

$

 20,939 

  

$

 81,125 

$

 56,430 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Net income (GAAP)

$

 17,156 

$

 22,150 

$

 23,726 

  

$

 58,431 

$

 43,670 

Restructuring charges and integration

  

  

  

  

  

  

  

  

  

  

  

   and acquisition-related costs, net of tax

  

 1,504 

  

 1,243 

  

 1,002 

  

  

 4,146 

  

 6,947 

Asset impairment charge and other,

  

  

  

  

  

  

  

  

  

  

  

   net of tax

  

 - 

  

 - 

  

 - 

  

  

 - 

  

 2,849 

Thailand flood related items, net of insurance

  

  

  

  

  

  

  

  

  

  

  

   and tax

  

 - 

  

 - 

  

 (7,817) 

  

  

 (1,263) 

  

 (7,817) 

Customer bankruptcy, net of tax

  

 4,831 

  

 - 

  

 - 

  

  

 4,831 

  

 - 

Non-GAAP net income

$

 23,491 

$

 23,393 

$

 16,911 

  

$

 66,145 

$

 45,649 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Earnings per share: (GAAP)

  

  

  

  

  

  

  

  

  

  

  

  

Basic

$

 0.32 

$

 0.41 

$

 0.44 

  

$

 1.09 

$

 0.80 

  

Diluted

$

 0.32 

$

 0.41 

$

 0.43 

  

$

 1.07 

$

 0.80 

  

  

  

  

  

  

  

  

  

  

  

  

  

Earnings per share: (Non-GAAP)

  

  

  

  

  

  

  

  

  

  

  

  

Basic

$

 0.44 

$

 0.43 

$

 0.31 

  

$

 1.23 

$

 0.84 

  

Diluted

$

 0.43 

$

 0.43 

$

 0.31 

  

$

 1.22 

$

 0.83 

  

  

  

  

  

  

  

  

  

  

  

  

  

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

  

  

  

  

  

  

  

  

  

  

  

  

Basic

  

 53,660 

  

 53,826 

  

 54,087 

  

  

 53,712 

  

 54,361 

  

Diluted

  

 54,265 

  

 54,405 

  

 54,611 

  

  

 54,387 

  

 54,868 


 

 

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,

  

  

2014 

  

2013 

  

  

2014 

  

2013 

Sales

$

 731,302 

$

 599,658 

  

$

 2,087,514 

$

 1,749,624 

Cost of sales

  

 676,008 

  

 554,218 

  

  

 1,923,346 

  

 1,622,983 

  

Gross profit

  

 55,294 

  

 45,440 

  

  

 164,168 

  

 126,641 

Selling, general and administrative expenses

  

 31,219 

  

 24,501 

  

  

 88,072 

  

 70,211 

Restructuring charges and integration

  

  

  

  

  

  

  

  

  

   and acquisition-related costs

  

 2,160 

  

 1,214 

  

  

 6,176 

  

 7,323 

Asset impairment charge and other

  

 - 

  

 - 

  

  

 - 

  

 2,606 

Thailand flood related items, net of insurance

  

 - 

  

 (9,748) 

  

  

 (1,571) 

  

 (9,748) 

  

Income from operations

  

 21,915 

  

 29,473 

  

  

 71,491 

  

 56,249 

Interest expense

  

 (494) 

  

 (481) 

  

  

 (1,443) 

  

 (1,403) 

Interest income

  

 535 

  

 292 

  

  

 1,718 

  

 997 

Other income (expense), net

  

 (1,105) 

  

 745 

  

  

 (980) 

  

 560 

  

Income before income taxes

  

 20,851 

  

 30,029 

  

  

 70,786 

  

 56,403 

Income tax expense

  

 3,695 

  

 6,303 

  

  

 12,355 

  

 12,733 

  

Net income

$

 17,156 

$

 23,726 

  

$

 58,431 

$

 43,670 

  

  

  

  

  

  

  

  

  

  

  

Earnings per share:

  

  

  

  

  

  

  

  

  

  

Basic

$

 0.32 

$

 0.44 

  

$

 1.09 

$

 0.80 

  

Diluted

$

 0.32 

$

 0.43 

  

$

 1.07 

$

 0.80 

  

  

  

  

  

  

  

  

  

  

  

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

  

  

  

  

  

  

  

  

  

  

Basic

  

 53,660 

  

 54,087 

  

  

 53,712 

  

 54,361 

  

Diluted

  

 54,265 

  

 54,611 

  

  

 54,387 

  

 54,868 


 

 

Benchmark Electronics, Inc. and Subsidiaries

  

  

  

  

  

  

  

  

  

Condensed Consolidated Balance Sheets

(in thousands)

  

  

  

  

  

  

September 30,

  

December 31,

  

  

  

  

  

  

2014 

  

2013 

  

  

  

  

  

  

(unaudited)

  

  

Assets

  

  

  

  

  

Current assets:

  

  

  

  

  

  

Cash and cash equivalents

$

 420,236 

$

 345,555 

  

  

Accounts receivable, net

  

 534,002 

  

 559,763 

  

  

Inventories, net

  

 434,166 

  

 396,699 

  

  

Other current assets

  

 36,382 

  

 40,816 

  

  

  

  

Total current assets

  

 1,424,786 

  

 1,342,833 

  

Long-term investments

  

 1,207 

  

 9,921 

  

Property, plant and equipment, net

  

 190,158 

  

 185,319 

  

Goodwill and other, net

  

 111,840 

  

 119,298 

  

  

  

  

Total assets

$

 1,727,991 

$

 1,657,371 

  

  

  

  

  

  

  

  

  

Liabilities and Shareholders’ Equity

  

  

  

  

  

Current liabilities:

  

  

  

  

  

  

Current installments of capital lease obligations

$

 651 

$

 582 

  

  

Accounts payable

  

 341,508 

  

 320,953 

  

  

Accrued liabilities

  

 77,160 

  

 76,842 

  

  

  

  

Total current liabilities

  

 419,319 

  

 398,377 

  

Capital lease obligations, less current installments

  

 9,021 

  

 9,521 

  

Other long-term liabilities

  

 23,197 

  

 22,440 

  

Shareholders’ equity

  

 1,276,454 

  

 1,227,033 

  

  

  

  

Total liabilities and shareholders’ equity

$

 1,727,991 

$

 1,657,371