8-K 1 0001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 13, 2000 BENCHMARK ELECTRONICS, INC. (Exact name of registrant as specified in its charter) TEXAS 1-10560 74-2211011 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 3000 TECHNOLOGY DRIVE, ANGLETON, TEXAS 77515 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (979) 849-6550 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (b) Pro forma financial information. Benchmark Electronics, Inc. Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended December 31, 1999 and the three months ended March 31, 2000. Benchmark Electronics, Inc. Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2000. 1 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BENCHMARK ELECTRONICS, INC. By: /s/ GAYLA J. DELLY GAYLA J. DELLY TREASURER Dated: July 13, 2000 2 ITEM 7(b). PRO FORMA FINANCIAL INFORMATION. 3 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS The following unaudited pro forma condensed combined statement of operations for the year ended December 31, 1999 gives effect to the acquisition by Benchmark of all the outstanding capital stock of AVEX Electronics, Inc. and its subsidiaries and certain affiliates ("AVEX") and the disposition of its Swedish operations as if they had occurred as of January 1, 1999. The following unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2000 gives effect to the disposition of its Swedish operations as if it had occurred as of January 1, 1999. The following unaudited pro forma condensed combined balance sheet as of March 31, 2000 gives effect to the disposition of the Swedish operations as if it had occurred on that date. The results of operations of the acquired AVEX business are included in Benchmark's historical results for the three months ended March 31, 2000 and the financial position of the acquired AVEX business is reflected in Benchmark's historical balance sheet as of March 31, 2000. The AVEX acquisition was accounted for under the purchase method of accounting. The unaudited pro forma condensed combined statements of operations are based on the historical financial statements of Benchmark and AVEX and the estimates and assumptions in the notes to the unaudited pro forma condensed combined statements of operations. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 1999 had been previously filed with Benchmark's Current Report on Form 8-K dated June 2, 2000. The pro forma statement of operations for the year ended December 31, 1999 presented herein supersedes the pro forma statement of operations filed in the Form 8-K of Benchmark dated June 2, 2000. On July 12, 2000, Benchmark entered into a definitive agreement to sell its Swedish operations, constituting inventories and fixed assets, at the net book value of these assets. The unaudited pro forma condensed combined financial statements should be read in conjunction with the historical financial statements of Benchmark and AVEX and "Management's Discussion and Analysis of Financial Conditions and Results of Operations" of Benchmark. The unaudited pro forma condensed combined financial statements do not purport to represent what Benchmark's results of operations or financial position would actually have been if the AVEX acquisition and the disposition of the Swedish operations had been consummated on the indicated dates, nor are they necessarily indicative of Benchmark's results of operations or financial position for any future period. 4 PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 (UNAUDITED)
SUBTOTAL PRO FORMA HISTORICAL HISTORICAL BEFORE DISPOSITION ------------- PRO FORMA ------------------- ---------------------------- SWEDISH ----------------------- BENCHMARK AVEX(A) ADJUSTMENTS COMBINED OPERATIONS k ADJUSTMENTS COMBINED --------- -------- ----------- ---------- ------------- ----------- ----------- (IN THOUSANDS, EXCEPT PER SHARE DATA) Sales................................ $877,839 $640,174 $ -- $1,518,013 $ 26,657 $ -- $ 1,491,356 Cost of sales........................ 810,309 632,194 -- 1,442,503 21,448 -- 1,421,055 --------- -------- ----------- ---------- ------------- ----------- ----------- Gross profit............... 67,530 7,980 75,510 5,209 70,301 Selling, general & administrative expenses........................... 32,477 333,313 (5,456)b 58,516 833 -- 57,683 (1,818)d Amortization of goodwill............. 6,430 -- 6,042 c 12,472 -- -- 12,472 --------- -------- ----------- ---------- ------------- ----------- ----------- Income (loss) from operations.............. 28,623 (25,333) 1,232 4,522 4,376 -- 146 Interest and other income net........ 1,350 108 (300)e 1,158 20 -- 1,138 Interest expense..................... (9,696) (13,941) 13,941 f (24,066) -- 1,071 l (22,995) (822)g (13,488)h -------- -------- ------- ---------- ------------- ----------- ----------- Income (loss) before taxes and extraordinary item............ 20,277 (39,166) 503 (18,386) 4,396 1,071 (21,711) Income tax expense (benefit)......... 7,005 960 176 i (6,435) 1,231 369 i (7,297) (14,576)j -------- -------- ------- ---------- ------------- ----------- ----------- Income (loss) before extraordinary item............ 13,272 (40,126) 14,903 (11,951) 3,165 702 (14,414) Income (loss) before extraordinary item per common share Basic........ $ 0.94 $ (0.78) $ (0.94) Income (loss) before extraordinary item per common share Diluted...... $ 0.88 $ (0.78) $ (0.94) Weighted average common shares outstanding: Basic........................... 14,081 15,387 m 15,387 m Diluted......................... 15,010 15,387 m 15,387 m
See accompanying notes to unaudited pro forma condensed combined statements of operations. PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
HISTORICAL PRO FORMA ---------------------------------- --------------------------- SWEDISH BENCHMARK OPERATIONS (k) ADJUSTMENTS TOTAL --------- --------------------- ----------- ---------- (IN THOUSANDS, EXCEPT PER SHARE DATA) Sales................................ $349,155 $ 23,129 $ -- $ 326,026 Cost of sales........................ 325,509 19,653 -- 305,856 --------- --------------------- ----------- ---------- Gross profit............... 23,646 3,476 20,170 Selling, general & administrative expenses........................... 12,681 544 -- 12,137 Amortization of goodwill............. 3,220 -- -- 3,220 --------- --------------------- ----------- ---------- Income from operations..... 7,745 2,932 -- 4,813 Interest and other income net........ 828 66 -- 762 Interest expense..................... (5,563) -- 268 l (5,295) --------- --------------------- ----------- ---------- Income before taxes ............ 3,010 2,998 268 280 Income tax expense .................. 1,033 1,034 92 i 91 --------- --------------------- ----------- ---------- Net income ..................... $ 1,977 $ 1,964 $ 176 $ 189 ========= ===================== =========== ========== Income per common share Basic........ $ 0.12 $ 0.01 Income per common share Diluted...... $ 0.12 $ 0.01 Weighted average common shares outstanding: Basic........................... 16,248 16,248 Diluted......................... 17,173 17,173
See accompanying notes to unaudited pro forma condensed combined statements of operations. 5 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATMENTS OF OPERATIONS Adjustments have been made to the unaudited pro forma condensed combined statements of operations to reflect the following: (a) Includes the historical results of operations of AVEX for the period to August 24, 1999, the consummation date of the acquisition. (b) To eliminate the historical costs related to (i) certain redundant executive headquarter costs; (ii) the termination of intercompany services previously provided by the Seller to AVEX under an intercompany arrangement that included fees based on the estimated utilization of Seller's resources; (iii) AVEX's domestic defined benefit pension plan, which plan and the obligations thereunder are not being continued by Benchmark; offset by (iv) the costs that Benchmark will incur to replace the Seller's intercompany services arrangement. A summary of such adjustments follows (in thousands):
FOR THE PERIOD ENDED -------------------- DECEMBER 31, 1999 ------------ Redundant executive headquarter costs.............................. $(2,948) Historical intercompany service fee................................ (2,384) Historical cost of pension plan not continued.......................... (791) Benchmark replacement of intercompany services arrangement............... 667 ------- Total...................... $(5,456)
(c) To record amortization of goodwill over an estimated useful life of 15 years. (d) To eliminate adjustments to the 1998 write down of certain assets related to AVEX's San Jose, California facility, which were not acquired by Benchmark, included in AVEX's historical financial statements. (e) To reduce interest income related to cash balances utilized in funding a portion of the AVEX acquisition. (f) To eliminate intercompany interest expense with the Seller and interest on AVEX notes payable not assumed under the Stock Purchase Agreement. (g) To record amortization of debt issuance costs over the life of the applicable debt instruments. (h) To record interest expense at 7.75%, 7.75%, and 6.0% on the amounts outstanding under the Revolving Credit Facility, Term Loan, and the Notes, respectively based on interest rates in effect upon consummation of the acquisition. A change in the interest rate of 1/8 of a percent would result in a change in annual interest expense related to the amounts outstanding under the Revolving Credit Facility and Term Loan of approximately $227,000. (i) To record income tax adjustments related to the above pro forma adjustments. (j) To adjust AVEX historical income tax expense as if AVEX was included in the consolidated federal income tax return of Benchmark. In the historical combined financial statements of AVEX, federal income taxes were provided as if AVEX filed a separate income tax return. (k) To eliminate the historical operating results of the Swedish operations. (l) To adjust interest expense at 7.75% as a result of the utilization of the proceeds from the disposition of the Swedish operations to pay down the Revolving Credit Facility. 6 (m) The following information reconciles the number of shares used to compute historical and pro forma earnings (loss) per common share (in thousands):
FOR THE YEAR ENDED ----------------- DECEMBER 31, 1999 ----------------- BASIC DILUTED ------ ------- Benchmark historical................. 14,081 15,010 Common shares issued in AVEX acquisition on a pro forma basis as of January 1, 1999................. 644 644 Common shares issued in public offering in June 1999 on pro forma basis as of January 1, 1999........ 662 662 Elimination of Benchmark stock options antidilutive on a pro forma basis in 1999................ -- (929) ------ ------ 15,387 15,387 ====== ======
The effect of the if-converted method for the Notes is antidilutive and 2.5 million of potential common shares have not been considered in computing diluted loss per common share. 7 BENCHMARK ELECTRONICS, INC. PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF MARCH 31, 2000 (UNAUDITED)
HISTORICAL PRO FORMA --------------- ---------------------------------- BENCHMARK ADJUSTMENTS TOTAL --------------- --------------- --------------- (IN THOUSANDS) ASSETS Current assets: Cash and cash equivalents ............................................. $ 1,073 $ -- $ 1,073 Accounts receivable, net .............................................. 224,376 -- 224,376 Income taxes receivable ............................................... 3,985 -- 3,985 Inventories ........................................................... 249,720 (12,549)a 237,171 Prepaid expenses and other debts ...................................... 15,636 -- 15,636 Deferred tax asset .................................................... 2,347 -- 2,347 --------------- --------------- --------------- Total current assets ................................................ 497,137 (12,549) 484,588 Net property, plant and equipment ....................................... 121,822 (1,274)a 120,548 Goodwill, net ........................................................... 169,225 -- 169,225 Other assets ............................................................ 23,648 -- 23,648 --------------- --------------- --------------- $ 811,832 $ (13,823) $ 798,009 =============== =============== =============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt ..................................... $ 19,011 $ -- $ 19,011 Accounts payable ...................................................... 216,117 -- 216,117 Accrued liabilities ................................................... 28,726 -- 28,726 --------------- --------------- --------------- Total current liabilities ........................................... 263,854 -- 263,854 Revolving line of credit ................................................ 95,100 (13,823)b 81,277 Long-term debt, less current portion .................................... 76,611 -- 76,611 Convertible subordinated notes .......................................... 80,200 -- 80,200 Deferred tax liability .................................................. 5,747 -- 5,747 Other long term liability ............................................... 5,789 -- 5,789 --------------- --------------- --------------- Total liabilities ................................................... 527,301 (13,823) 513,478 Shareholders' equity: Common shares ......................................................... 1,628 -- 1,628 Additional paid-in capital ............................................ 201,732 -- 201,732 Retained earnings ..................................................... 80,751 -- 80,751 Accumulated other comprehensive loss .................................. 540 -- 540 Less treasury shares, at cost ......................................... (120) -- (120) --------------- --------------- --------------- Total shareholders' equity .......................................... 284,531 -- 284,531 --------------- --------------- --------------- $ 811,832 $ (13,823) $ 798,009 =============== =============== ===============
See accompanying notes to unaudited pro forma condensed combined balance sheet. 8 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET Adjustments have been made to the unaudited condensed combined balance sheet to reflect the following: (a) To reflect the disposition of the Swedish operations. (b) To reflect the utilization of the proceeds from the disposition of the Swedish operations to pay down the Revolving Credit Facility. 9