Unassociated Document

ANGLETON, TX, JULY 24, 2008 – Benchmark Electronics, Inc. (NYSE: BHE), a leading contract manufacturing provider, announced sales of $682 million for the quarter ended June 30, 2008, compared to $756 million for the same quarter in the prior year. Second quarter net income was $22 million, or $0.33 per diluted share. In the comparable period of 2007, net income was $26 million, or $0.35 per diluted share.

Excluding amortization of intangibles and the impact of stock-based compensation costs, the Company would have reported net income of $24 million, or $0.35 per diluted share, in the second quarter of 2008. Excluding restructuring charges, integration costs, amortization of intangibles and the impact of stock-based compensation costs, the Company would have reported net income of $29 million, or $0.39 per diluted share, in the second quarter of 2007.

“Our focus in this environment is on strong operational execution and solid program bookings,” said Cary T. Fu, the Company’s Chief Executive Officer. “Operationally our execution was solid during the second quarter, although revenues were impacted by maturing programs declining at a more rapid pace than our new programs ramped, and by the impact of a soft macro environment. We believe this is a near-term challenge and that we are well positioned for growth, given the number of new programs that we have won.”

This press release includes financial measures for earnings and earnings per share that exclude certain items and therefore are not in accordance with 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.

This news 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 that “we believe this is a near-term challenge and that we are well positioned for growth, given the number of new programs that we have won”, and our sales and earnings per share guidance for the third quarter of 2008, 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, including but not limited to industry and economic conditions, and customer actions.

All forward-looking statements included in this release are based upon information available to Benchmark as of the date of the release, and Benchmark assumes no obligation to update any such forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Persons are advised to consult further disclosures on related subjects in Benchmark’s Form 10-K for the year ended December 31, 2007, in its other filings with the Securities and Exchange Commission and in its press releases.

Benchmark Electronics, Inc. provides electronics manufacturing, design and engineering services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment, testing and instrumentation products, and telecommunication equipment. Benchmark’s global operations include 20 facilities in ten countries. Benchmark’s Common Shares trade on the New York Stock Exchange under the symbol BHE.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2008		2007		2008		2007

Income from operations (GAAP)	$	22,918	$	27,624	$	44,411	$	55,072
Stock-based compensation		1,260		1,184		2,048		1,812
Restructuring charges and integration costs		—		2,205		—		5,550
Amortization of intangibles		447		447		894		894

Non-GAAP income from operations	$	24,625	$	31,460	$	47,353	$	63,328



Net income (GAAP)	$	22,432	$	25,921	$	45,051	$	50,397
Stock-based compensation, net of tax		877		803		1,434		1,245
Restructuring charges and integration costs, net of tax		—		1,551		—		4,168
Amortization of intangibles, net of tax		285		292		570		614

Non-GAAP net income	$	23,594	$	28,567	$	47,055	$	56,424


Numerator for basic earnings per share - net income (GAAP)	$	22,432	$	25,921	$	45,051	$	50,397
Interest expense on convertible debt, net of tax		—		32		—		147

Numerator for diluted earnings per share (GAAP)	$	22,432	$	25,953	$	45,051	$	50,544


Earnings per share: (GAAP)
Basic	$	0.33	$	0.36	$	0.66	$	0.70
Diluted	$	0.33	$	0.35	$	0.66	$	0.69

Numerator for basic earnings per share - net income (Non-GAAP)	$	23,594	$	28,567	$	47,055	$	56,424
Interest expense on convertible debt, net of tax		—		32		—		147

Numerator for diluted earnings per share (Non-GAAP)	$	23,594	$	28,599	$	47,055	$	56,571


Earnings per share: (Non-GAAP)
Basic	$	0.35	$	0.39	$	0.69	$	0.78
Diluted	$	0.35	$	0.39	$	0.69	$	0.77

Weighted average shares used in calculating earnings per share:
Basic		67,541		72,540		68,436		71,991
Diluted		67,714		73,346		68,672		73,026

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007

Net sales	$	682,416		$	756,295		$	1,366,725		$	1,508,777
Cost of sales		636,389			701,800			1,275,483			1,399,794

Gross profit		46,027			54,495			91,242			108,983

Selling, general and administrative expenses		22,662			24,219			45,937			47,467
Amortization of intangibles		447			447			894			894
Restructuring charges and integration costs		—			2,205			—			5,550

Income from operations		22,918			27,624			44,411			55,072

Other income (expense):
Interest income		1,986			2,700			5,229			4,449
Interest expense		(359	)		(564	)		(724	)		(1,375	)
Other		709			887			2,337			853
Total other income, net		2,336			3,023			6,842			3,927

Income before income taxes		25,254			30,647			51,253			58,999

Income tax expense		2,822			4,726			6,202			8,602

Net income	$	22,432		$	25,921		$	45,051		$	50,397


Numerator for basic earnings per share - net income	$	22,432		$	25,921		$	45,051		$	50,397
Interest expense on convertible debt, net of tax		—			32			—			147
Numerator for diluted earnings per share	$	22,432		$	25,953		$	45,051		$	50,544


Denominator for basic earnings per share - weighted average number of common shares outstanding during the period		67,541			72,540			68,436			71,991
Incremental common shares attributable to exercise of outstanding equity instruments		173			806			236			1,035
Denominator for diluted earnings per share		67,714			73,346			68,672			73,026
Earnings per share:
Basic	$	0.33		$	0.36		$	0.66		$	0.70
Diluted	$	0.33		$	0.35		$	0.66		$	0.69

Assets

Current assets:
Cash and cash-equivalents	$	288,015
Short-term investments		1,000
Accounts receivable, net		472,183
Inventories, net		393,020
Other current assets		58,818

Total current assets		1,213,036

Long-term investments		55,484
Property, plant and equipment, net		145,209
Other assets, net		27,337
Goodwill, net		285,125

Total assets	$	1,726,191

Liabilities and Shareholders’ Equity

Current liabilities:
Current installments of long-term debt and capital lease obligations	$	333
Accounts payable		339,715
Accrued liabilities		55,051

Total current liabilities		395,099

Long-term debt and capital lease obligations, less current installments		12,000
Other long-term liabilities		44,505
Shareholders’ equity		1,274,587

Total liabilities and shareholders’ equity	$	1,726,191

ELLEN M. DYLLA
INVESTOR RELATIONS	July 24, 2008
(979) 849-6550