SCOTTSDALE, Ariz., July 19, 2017 /PRNewswire/ -- Benchmark
Electronics, Inc. (NYSE: BHE) today announced financial results for
the second quarter ended June 30,
2017.
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Three Months
Ended
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Jun
30,
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Mar 31,
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Jun 30,
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In millions,
except EPS
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2017
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2017
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2016
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Net sales
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$617
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$567
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$579
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Net income
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$17
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$10
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$13
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Net income –
non-GAAP
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$19
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$17
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$17
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Diluted
EPS
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$0.34
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$0.19
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$0.26
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Diluted EPS –
non-GAAP
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$0.38
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$0.34
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$0.35
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Operating
margin
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3.6%
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2.2%
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3.1%
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Operating margin –
non-GAAP
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4.1%
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3.8%
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4.2%
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A reconciliation of GAAP and non-GAAP results is included
below.
"I am very pleased with our second quarter performance; the
Company delivered on its commitments and posted strong operational
results for the quarter. Revenue exceeded guidance and
reflected year-on-year growth for the second consecutive
quarter. Non-GAAP EPS of $0.38
exceeded the high end of our guidance by $0.03; cash cycle days ended at 65 days, well
below our 70 day target; and we achieved 9.5% ROIC, a 50 bps
quarter-over-quarter improvement," said Paul Tufano, Benchmark's President and CEO.
"We remain focused on the key initiatives to transform and
reposition the Company to achieve our long-term business model
objectives, namely the optimization of our global network, the
implementation of our market-sector sales organization and the
expansion of our engineering solutions capability," added
Tufano. "We are in the process of relocating our corporate
headquarters to Arizona and
anticipate that the majority of this move will be completed in the
third quarter. I am also very pleased to have Mike Buseman join us as our new head of Global
Operations. Under Mike's leadership, we will look to
accelerate our initiatives related to operational excellence and
customer experience. Additionally, our market-sector sales
focus is beginning to yield new customer growth, especially in our
targeted higher-value markets, as reflected in our bookings for the
quarter. We continue to emphasize engineering-led customer
engagements and are aggressively expanding our offerings to provide
higher-value propositions to current and potential customers."
Second Quarter 2017 Financial Highlights
- Operating margin was 3.6% (non-GAAP 4.1%).
- Cash flows from operating activities were $15 million.
- Cash conversion cycle improved 18 days from 83 at June 30, 2016 to 65 days at June 30, 2017.
- Cash was $749 million at
June 30, of which $92 million was available in the U.S.
Cash Conversion Cycle
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Jun 30,
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Mar 31,
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Jun 30,
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2017
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2017
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2016
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Accounts receivable
days
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57
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61
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66
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Inventory
days
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67
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70
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64
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Accounts payable
days
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(55)
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(60)
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(47)
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Customer
deposits
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(4)
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(4)
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-
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65
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67
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83
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Second Quarter 2017 Industry Sector Update
Revenue by industry sector (dollars in millions) was as
follows.
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Jun 30,
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Mar 31,
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Jun 30,
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Higher-Value
Markets
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2017
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2017
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2016
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Industrials
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$
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124
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20
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%
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$
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118
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21
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%
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$
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144
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25
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%
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A&D
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100
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16
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104
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18
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86
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15
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Medical
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86
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14
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86
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15
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92
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16
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Test &
Instrumentation
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89
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15
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77
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14
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60
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10
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$
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399
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65
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%
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$
|
385
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68
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%
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$
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382
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66
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%
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Jun 30,
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Mar 31,
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Jun 30,
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Traditional
Markets
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2017
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2017
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2016
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Computing
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$
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142
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23
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%
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$
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101
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18
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%
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$
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110
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19
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%
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Telecommunications
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76
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12
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81
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14
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87
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15
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$
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218
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35
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%
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$
|
182
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32
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%
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$
|
197
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34
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%
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Total
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$
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617
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100
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%
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$
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567
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100
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%
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$
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579
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100
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%
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Overall revenue increased 6% year-over-year driven by continued
strong demand in Test & Instrumentation serving the
semi-capital equipment market, Computing growth from existing
storage and new security customers, and Aerospace and Defense
(A&D) growth from defense programs. Industrials and Medical
growth remained muted year-over-year from softness across several
of our top customers.
Second Quarter 2017 Bookings Update
- New program bookings of $129 to $155
million.
- 14 engineering awards supporting early engagement
opportunities.
- 25 manufacturing wins across all market sectors.
The Company projects that new program bookings for the second
quarter will result in annualized revenue of $129 to $155 million when fully launched in the
next 12-18 months. The new program bookings align with
Benchmark's strategic focus on higher-value markets.
Third Quarter 2017 Outlook
- Revenue between $575 - $595
million.
- Diluted GAAP earnings per share between $0.29 - $0.33.
- Diluted non-GAAP earnings per share between $0.32 - $0.36 (excluding restructuring charges
and amortization of intangibles expected to approximate
$0.03 per share). The income tax
impact of the non-GAAP adjustments using the applicable effective
tax rates is $0.03 per share.
Second Quarter 2017 Results Conference Call Details
A conference call hosted by Benchmark management will be held today
at 5:00 p.m. Eastern Time to discuss
the Company's financial results and 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 provides worldwide integrated electronics manufacturing
services (EMS), engineering and design services, and precision
machining services to original equipment manufacturers in the
following industries: industrial controls, aerospace and defense,
telecommunications, computers and related products for business
enterprises, medical devices, and test and instrumentation.
Benchmark's global operations include facilities in seven
countries, and its common shares trade on the New York Stock
Exchange under the symbol BHE.
Non-GAAP Financial Measures
This press release includes financial measures 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.
Management discloses non-GAAP information to provide investors with
additional information to analyze the Company's performance and
underlying trends. Management uses non-GAAP measures that
exclude certain items in order to better assess operating
performance and help investors compare results with our previous
guidance. Benchmark's non-GAAP information is not necessarily
comparable to the 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 a measure of the Company's profitability
or liquidity. Readers 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," "plan,"
"anticipate," "project," "predict," "goals," "targeting" and
similar terms, and the negatives thereof, often identify
forward-looking statements, which are not limited to historical
facts. The Company's forward-looking statements include,
among other things, projections relating to the future value of
bookings and third quarter 2017 revenues and diluted earnings per
share. Although Benchmark believes these statements are based
upon reasonable assumptions, they involve risks and uncertainties
relating to operations, markets and business environment
generally. If one or more of these risks or uncertainties
materializes 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
hereof, and the Company assumes no obligation to update them.
Readers are advised to consult further disclosures on related
subjects, particularly in Item 1A, "Risk Factors" of the Company's
Annual Report on Form 10-K for the year ended December 31, 2016, in its other filings with the
Securities and Exchange Commission and in its press releases.
Benchmark
Electronics, Inc. and Subsidiaries
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Reconciliation of
GAAP to Non-GAAP Financial Results
|
(Amounts in
Thousands, Except Per Share Data)
|
(UNAUDITED)
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Three Months
Ended
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Six Months
Ended
|
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Jun 30,
|
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Mar 31,
|
|
Jun 30,
|
|
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June 30,
|
|
|
|
2017
|
|
2017
|
|
2016
|
|
|
2017
|
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2016
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|
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Income from
operations (GAAP)
|
$
|
22,227
|
$
|
12,417
|
$
|
17,740
|
|
$
|
34,644
|
$
|
34,008
|
Restructuring charges
and other costs
|
|
1,544
|
|
1,511
|
|
3,602
|
|
|
3,055
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|
6,391
|
Customer insolvency
(recovery)
|
|
(710)
|
|
5,120
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-
|
|
|
4,410
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|
-
|
Amortization of
intangible assets
|
|
2,481
|
|
2,481
|
|
2,972
|
|
|
4,962
|
|
5,775
|
Non-GAAP income from
operations
|
$
|
25,542
|
$
|
21,529
|
$
|
24,314
|
|
$
|
47,071
|
$
|
46,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Net income
(GAAP)
|
$
|
17,176
|
$
|
9,687
|
$
|
12,685
|
|
$
|
26,863
|
$
|
23,737
|
Restructuring charges
and other costs
|
|
1,544
|
|
1,511
|
|
3,602
|
|
|
3,055
|
|
6,391
|
Customer insolvency
(recovery)
|
|
(710)
|
|
5,120
|
|
-
|
|
|
4,410
|
|
-
|
Amortization of
intangible assets
|
|
2,481
|
|
2,481
|
|
2,972
|
|
|
4,962
|
|
5,775
|
Income tax
adjustments(1)
|
|
(1,265)
|
|
(1,580)
|
|
(2,087)
|
|
|
(2,845)
|
|
(3,729)
|
Non-GAAP net
income
|
$
|
19,226
|
$
|
17,219
|
$
|
17,172
|
|
$
|
36,445
|
$
|
32,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
(GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.35
|
$
|
0.20
|
$
|
0.26
|
|
$
|
0.54
|
$
|
0.48
|
|
Diluted
|
$
|
0.34
|
$
|
0.19
|
$
|
0.26
|
|
$
|
0.54
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.39
|
$
|
0.35
|
$
|
0.35
|
|
$
|
0.73
|
$
|
0.65
|
|
Diluted
|
$
|
0.38
|
$
|
0.34
|
$
|
0.35
|
|
$
|
0.73
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares used in calculating earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
49,766
|
|
49,511
|
|
49,323
|
|
|
49,640
|
|
49,586
|
|
Diluted
|
|
50,239
|
|
50,080
|
|
49,667
|
|
|
50,209
|
|
50,042
|
|
|
(1)
|
This amount
represents the tax impact of the non-GAAP adjustments using the
applicable effective tax rates.
|
Benchmark
Electronics, Inc. and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Income
|
(Amounts in
Thousands, Except Per Share Data)
|
(UNAUDITED)
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
Sales
|
$
|
616,904
|
$
|
579,342
|
|
$
|
1,183,405
|
$
|
1,128,567
|
Cost of
sales
|
|
558,317
|
|
526,488
|
|
|
1,075,758
|
|
1,025,396
|
|
Gross
profit
|
|
58,587
|
|
52,854
|
|
|
107,647
|
|
103,171
|
Selling, general and
administrative expenses
|
|
32,335
|
|
28,540
|
|
|
64,986
|
|
56,997
|
Amortization of
intangible assets
|
|
2,481
|
|
2,972
|
|
|
4,962
|
|
5,775
|
Restructuring charges
and other costs
|
|
1,544
|
|
3,602
|
|
|
3,055
|
|
6,391
|
|
Income from
operations
|
|
22,227
|
|
17,740
|
|
|
34,644
|
|
34,008
|
Interest
expense
|
|
(2,312)
|
|
(2,299)
|
|
|
(4,537)
|
|
(4,633)
|
Interest
income
|
|
1,213
|
|
329
|
|
|
2,287
|
|
593
|
Other income
(expense), net
|
|
(830)
|
|
71
|
|
|
(911)
|
|
(152)
|
|
Income before income
taxes
|
|
20,298
|
|
15,841
|
|
|
31,483
|
|
29,816
|
Income tax
expense
|
|
3,122
|
|
3,156
|
|
|
4,620
|
|
6,079
|
|
Net income
|
$
|
17,176
|
$
|
12,685
|
|
$
|
26,863
|
$
|
23,737
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.35
|
$
|
0.26
|
|
$
|
0.54
|
$
|
0.48
|
|
Diluted
|
$
|
0.34
|
$
|
0.26
|
|
$
|
0.54
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares used in calculating earnings per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
49,766
|
|
49,323
|
|
|
49,640
|
|
49,586
|
|
Diluted
|
|
50,239
|
|
49,667
|
|
|
50,209
|
|
50,042
|
Benchmark
Electronics, Inc. and Subsidiaries
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
(UNAUDITED)
|
(in
thousands)
|
|
|
|
|
|
|
June 30,
|
|
December
31,
|
|
|
|
|
|
|
2017
|
|
2016
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
749,311
|
$
|
681,433
|
|
|
Accounts receivable,
net
|
|
391,830
|
|
440,692
|
|
|
Inventories
|
|
416,030
|
|
381,334
|
|
|
Other current
assets
|
|
40,473
|
|
28,203
|
|
|
|
|
Total current
assets
|
|
1,597,644
|
|
1,531,662
|
|
Property, plant and
equipment, net
|
|
172,080
|
|
166,148
|
|
Goodwill and other,
net
|
|
294,716
|
|
300,858
|
|
|
|
|
Total
assets
|
$
|
2,064,440
|
$
|
1,998,668
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Current installments
of long-term debt and capital lease obligations
|
$
|
15,333
|
$
|
12,396
|
|
|
Accounts
payable
|
|
343,241
|
|
326,249
|
|
|
Accrued
liabilities
|
|
87,548
|
|
73,736
|
|
|
|
|
Total current
liabilities
|
|
446,122
|
|
412,381
|
|
Long-term debt and
capital lease obligations, less current installments
|
|
202,122
|
|
211,252
|
|
Other long-term
liabilities
|
|
10,359
|
|
9,570
|
|
Shareholders'
equity
|
|
1,405,837
|
|
1,365,465
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
2,064,440
|
$
|
1,998,668
|
Benchmark
Electronics, Inc. and Subsidiaries
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statement of Cash Flows
|
(in
thousands)
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
$
|
26,863
|
$
|
23,737
|
|
Depreciation and
amortization
|
|
24,317
|
|
27,900
|
|
Stock-based
compensation expense
|
|
4,505
|
|
3,981
|
|
Accounts receivable,
net
|
|
49,394
|
|
57,044
|
|
Inventories
|
|
(34,218)
|
|
37,034
|
|
Accounts
payable
|
|
16,675
|
|
23,084
|
|
Other changes in
working capital and other
|
|
4,993
|
|
(14,646)
|
|
Net cash provided by
operations
|
|
92,529
|
|
158,134
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Additions to
property, plant and equipment and software
|
|
(26,379)
|
|
(16,203)
|
|
Other investing
activities, net
|
|
380
|
|
305
|
|
Net cash used in investing
activities
|
|
(25,999)
|
|
(15,898)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Share
repurchases
|
|
(2,000)
|
|
(29,315)
|
|
Net debt
activity
|
|
(6,185)
|
|
(6,149)
|
|
Other financing
activities, net
|
|
7,282
|
|
409
|
|
Net cash used in financing
activities
|
|
(903)
|
|
(35,055)
|
Effect of exchange
rate changes
|
|
2,251
|
|
72
|
Net increase in cash
and cash equivalents
|
|
67,878
|
|
107,253
|
|
Cash and cash
equivalents at beginning of year
|
|
681,433
|
|
465,995
|
|
Cash and cash
equivalents at end of period
|
$
|
749,311
|
$
|
573,248
|
View original
content:http://www.prnewswire.com/news-releases/benchmark-electronics-reports-second-quarter-2017-results-300490860.html
SOURCE Benchmark Electronics, Inc.