EX-99.1 2 ex991.htm EXHIBIT 99.1  

 

 

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

 

BENCHMARK ELECTRONICS REPORTS FIRST QUARTER 2019 RESULTS

 

·          Quarterly revenue of $603 million

·          Quarterly EPS of $0.34 ($0.33 non-GAAP)

 

TEMPE, AZ, April 24, 2019 – Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the first quarter ended March 31, 2019.

 

 

 

Three Months Ended

 

 

Mar 31,

 

 

Dec 31,

 

Mar 31,

In millions, except EPS

2019

 

 

2018

 

2018

Net sales

$603

 

 

$657

 

$608

Net income (loss)(1)

$14

 

 

$28

 

($24)

Net income – non-GAAP(2)

$13

 

 

$18

 

$20

Diluted EPS(1)

$0.34

 

 

$0.64

 

($0.49)

Diluted EPS – non-GAAP(2)

$0.33

 

 

$0.41

 

$0.41

 

 

 

 

 

 

 

 

Operating margin

2.7%

 

 

2.3%

 

3.0%

Operating margin – non-GAAP(2)

2.9%

 

 

3.2%

 

3.7%

 

(1) Includes $40 million ($0.82 per share) for the three months ended March 31, 2018 of foreign withholding taxes and state tax expense of repatriation of foreign cash to US parent company.

 

(2)  A reconciliation of GAAP and non-GAAP results is included below.

 

Jeff Benck, Benchmark’s President and CEO stated, “We delivered a solid first quarter with revenue and earnings in line with our expectations.  Revenues were up year-over-year in our targeted A&D, Medical, and Telecommunications markets and non-GAAP gross margins increased 40 bps sequentially to 8.8%.”

 

“Since joining Benchmark Electronics, I have visited several of our facilities and have experienced first-hand our unique and differentiated capabilities.  I am excited by the talent of our employees across the business and the dedication they bring to solving our customers’ most challenging problems.  Our advanced design and manufacturing services as well as technology solutions provide a strong foundation for innovation and industry excellence as we enable our customers’ new product ideas.  Looking ahead, we remain focused on capturing opportunities to grow our revenue, expand our operating margins, and create long-term value for our shareholders.”

1 

 

Cash Conversion Cycle

 

 

Mar 31,

 

 

 

Dec 31,

 

 

 

Mar 31,

 

 

 

2019

 

 

 

2018

 

 

 

2018

 

 

 

 

 

 

 

 

 

 

Accounts receivable days

 

61

 

 

 

64

 

 

 

59

 

Contract asset days

 

23

 

 

 

19

 

 

 

22

 

Inventory days

 

52

 

 

 

46

 

 

 

50

 

Accounts payable days

 

(61)

 

 

 

(63)

 

 

 

(60)

 

Customer deposits

 

(3)

 

 

 

(4)

 

 

 

(3)

 

 

 

72

 

 

 

62

 

 

 

68

 

 

First Quarter 2019 Industry Sector Update

Revenue and percentage of sales by industry sector (in millions) was as follows.

 

 

 

Mar 31,

 

 

 

Dec 31,

 

 

 

Mar 31,

 

 

Higher-Value Markets

 

2019

 

 

 

2018

 

 

2018

Industrials

$

116

 

20

%

 

$

121

 

18

%

 

$

125

 

20

%

A&D

 

104

 

17

 

 

 

105

 

16

 

 

 

98

 

16

 

Medical

 

103

 

17

 

 

 

104

 

16

 

 

 

97

 

16

 

Test &  Instrumentation

 

66

 

11

 

 

 

70

 

11

 

 

 

102

 

17

 

 

 

$

389

 

65

%

 

$

400

 

61

%

 

$

422

 

69

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mar 31,

 

 

 

Dec 31,

 

 

 

Mar 31,

 

 

Traditional Markets

 

2019

 

 

 

2018

 

 

2018

Computing

$

124

 

21

%

 

$

171

 

26

%

 

$

103

 

17

%

Telecommunications

 

90

 

14

 

 

 

86

 

13

 

 

 

83

 

14

 

 

 

$

214

 

35

%

 

$

257

 

39

%

 

$

186

 

31

%

 

Total

$

603

 

100

%

 

$

657

 

100

%

 

$

608

 

100

%

 

Higher‐value markets were down 8% year‐over‐year from softer demand in Test & Instrumentation (primarily semi-capital equipment).  Traditional market revenues were up 14% year-over-year primarily from higher Computing revenues.

 

First Quarter 2019 Bookings Update

·          New program bookings of $161 million at the midpoint of projected annualized revenue.

·          20 engineering awards supporting early engagement opportunities.

·          34 manufacturing wins across all market sectors.

 

The Company projects that new program bookings for the first quarter will result in annualized revenue of $134 to $188 million when fully launched in the next 12-24 months, medical up to 36 months.

 

 

 

2 

 

Second Quarter 2019 Outlook

·          Revenue between $555 - $585 million.

·          Diluted GAAP earnings per share between $0.15 - $0.25.

·          Diluted non-GAAP earnings per share between $0.28 - $0.36 (excluding restructuring charges and other costs and amortization of intangibles).

 

First Quarter 2019 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 is a worldwide provider of innovative product design, engineering services, technology solutions and advanced manufacturing services.  From initial product concept to volume production, including direct order fulfillment and aftermarket services, Benchmark has been providing integrated services and solutions to original equipment manufacturers since 1979.  Today, Benchmark proudly serves the following industries: aerospace and defense, medical technologies, complex industrials, test and instrumentation, next-generation telecommunications and high-end computing.  Benchmark’s global operations network includes facilities in eight countries and 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

623-300-7052 or lisa.weeks@bench.com

 

Forward-Looking Statements

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  The words “expect,” “estimate,” “anticipate,” “predict” and similar expressions, and the negatives thereof, often identify forward-looking statements, which are not limited to historical facts.  Forward-looking statements include, among other things: guidance for 2019 results; projected annual revenues resulting from new program bookings; statements, express or implied, concerning future operating results or margins, the ability to generate sales and income or cash flow; and Benchmark’s business and growth strategies and expected growth and performance.  Although Benchmark believes these statements are based upon reasonable assumptions, they involve risks and uncertainties relating to operations, markets and the 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.  Readers are advised to consult further disclosures on these risks and uncertainties, particularly in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent filings with the Securities and Exchange Commission.  All forward-looking

3 

 

statements included in this document are based upon information available to the Company as of the date of this document, and it assumes no obligation to update them.

 

Non-GAAP Financial Measures

This document includes certain financial measures that exclude items and therefore are not in accordance with U.S. generally accepted accounting principles (“GAAP”).  A detailed reconciliation between GAAP results and results excluding special items (“non-GAAP”) is included in the following tables attached to this document.  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.  The Company’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.

###

4 

 

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,

 

 

 

 

2019

 

2018

 

2018

 

 

 

 

 

 

 

 

Income from operations (GAAP)

$

16,087

$

15,265

$

17,967

 

Restructuring charges and other costs

 

1,576

 

3,527

 

2,235

 

Customer recovery

 

(2,742)

 

(113)

 

(341)

 

Amortization of intangible assets

 

2,367

 

2,384

 

2,366

 

Non-GAAP income from operations

$

17,288

$

21,063

$

22,227

 

 

 

 

 

 

 

 

 

 

Gross Profit (GAAP)

$

53,800

$

55,199

$

58,318

 

Customer recovery

 

(1,024)

 

(113)

 

(341)

 

Non-GAAP Gross Profit

$

52,776

$

55,086

$

57,977

 

 

 

 

 

 

 

 

 

 

Net income (loss) (GAAP)

$

13,773

$

27,716

$

(23,641)

 

Restructuring charges and other costs

 

1,576

 

3,527

 

2,235

 

Customer recovery

 

(2,742)

 

(113)

 

(341)

 

Amortization of intangible assets

 

2,367

 

2,384

 

2,366

 

Settlement

 

(1,836)

 

-

 

-

 

Income tax adjustments(1)

 

206

 

(1,050)

 

(818)

 

Tax Cuts and Jobs Act(2)

 

-

 

(14,529)

 

40,114

 

Non-GAAP net income

$

13,344

$

17,935

$

19,915

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

Diluted (GAAP)

$

0.34

$

0.64

$

(0.49)

 

 

Diluted (Non-GAAP)

$

0.33

$

0.41

$

0.41

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares used

 

 

 

 

 

 

 

 in calculating earnings (loss) per share:

 

 

 

 

 

 

 

 

Diluted (GAAP)

 

40,853

 

43,229

 

48,517

 

 

Diluted (Non-GAAP)

 

40,853

 

43,229

 

48,837

 

(1)               This amount represents the tax impact of the non-GAAP adjustments using the applicable effective tax rates.

(2)               This amount represents the impact of repatriating foreign earnings from our foreign jurisdictions to the U.S., offset by available U.S. foreign tax credits, and a non-recurring tax true-up benefit as a result of finalizing our federal and state income tax accounting for the U.S. transitions toll tax from the 2017 Tax Cuts and Jobs Act.

5 

 

Benchmark Electronics, Inc. and Subsidiaries

 

 

 

 

 

 

 

 

Consolidated Statements of Income

 

(Amounts in Thousands, Except Per Share Data)

 

(UNAUDITED)

 

 

 

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

2019

 

2018

 

 

 

 

 

 

Sales

$

602,820

$

608,136

 

Cost of sales

 

549,020

 

549,818

 

 

Gross profit

 

53,800

 

58,318

 

Selling, general and administrative expenses

 

33,770

 

35,750

 

Amortization of intangible assets

 

2,367

 

2,366

 

Restructuring charges and other costs

 

1,576

 

2,235

 

 

Income from operations

 

16,087

 

17,967

 

Interest expense

 

(1,609)

 

(2,428)

 

Interest income

 

1,297

 

1,933

 

Other income, net

 

1,604

 

43

 

 

Income before income taxes

 

17,379

 

17,515

 

Income tax expense

 

3,606

 

41,156

 

 

Net income (loss)

$

13,773

$

(23,641)

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

Basic

$

0.34

$

(0.49)

 

 

Diluted

$

0.34

$

(0.49)

 

 

 

 

 

 

 

 

Weighted-average number of shares used in calculating

 

 

 

 

 

  earnings (loss) per share:

 

 

 

 

 

 

Basic

 

40,630

 

48,517

 

 

Diluted

 

40,853

 

48,517

 

6 

 

 

 

 

 

 

 

 

 

 

 

Benchmark Electronics, Inc. and Subsidiaries

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

(UNAUDITED)

(in thousands)

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

395,316

 

$

458,102

 

 

Accounts receivable, net

 

405,358

 

 

468,161

 

 

Contract assets

 

157,025

 

 

140,082

 

 

Inventories

 

315,563

 

 

309,975

 

 

Other current assets

 

24,667

 

 

27,230

 

 

 

 

Total current assets

 

1,297,929

 

 

1,403,550

 

Property, plant and equipment, net

 

203,796

 

 

210,954

 

Operating lease right-of-use assets

 

81,159

 

 

-

 

Goodwill and other, net

 

286,046

 

 

285,279

 

 

 

 

Total assets

$

1,868,930

 

$

1,899,783

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Current installments of long-term debt and finance lease obligations

$

8,706

 

$

6,793

 

 

Accounts payable

 

371,732

 

 

422,053

 

 

Accrued liabilities

 

109,798

 

 

108,313

 

 

 

 

Total current liabilities

 

490,236

 

 

537,159

 

Long-term debt and finance lease obligations, less current installments

 

145,205

 

 

147,277

 

Operating lease liabilities

 

70,859

 

 

-

 

Other long-term liabilities

 

83,905

 

 

83,122

 

Shareholders’ equity

 

1,078,725

 

 

1,132,225

 

 

 

 

Total liabilities and shareholders’ equity

$

1,868,930

 

$

1,899,783

7 

 

 

 

 

 

 

 

 

 

 

 

Benchmark Electronics, Inc. and Subsidiaries

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Cash Flows

(in thousands)

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss)

$

13,773

 

$

(23,641)

 

Depreciation and amortization

 

12,172

 

 

12,384

 

Stock-based compensation expense

 

2,772

 

 

2,870

 

Accounts receivable, net

 

64,176

 

 

33,419

 

Contract assets

 

(16,943)

 

 

(1,127)

 

Inventories

 

(5,862)

 

 

(38,210)

 

Accounts payable

 

(45,914)

 

 

2,337

 

Other changes in working capital and other, net

 

(7,760)

 

 

36,498

 

 

Net cash provided by operations

 

16,414

 

 

24,530

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Additions to property, plant and equipment and software

 

(10,074)

 

 

(20,877)

 

Other investing activities, net

 

(97)

 

 

(122)

 

 

Net cash used in investing activities

 

(10,171)

 

 

(20,999)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Share repurchases

 

(61,080)

 

 

(58,381)

 

Equity forward contract related to accelerated share repurchase

 

-

 

 

(10,000)

 

Net debt activity

 

(274)

 

 

(4,551)

 

Other financing activities, net

 

(7,160)

 

 

2,316

 

 

Net cash used in financing activities

 

(68,514)

 

 

(70,616)

Effect of exchange rate changes

 

(515)

 

 

866

Net decrease in cash and cash equivalents

 

(62,786)

 

 

(66,219)

 

Cash and cash equivalents at beginning of year

 

458,102

 

 

742,546

 

Cash and cash equivalents at end of period

$

395,316

 

$

676,327

 

 

 

 

 

 

 

 

 

 

 

8