Unassociated Document

ANGLETON, TX, FEBRUARY 5, 2009 – Benchmark Electronics, Inc. (NYSE: BHE), a leading contract manufacturing provider, announced sales of $582 million for the quarter ended December 31, 2008, compared to $735 million for the same quarter in the prior year. The Company reported a fourth quarter 2008 net loss of $204 million, or $3.13 per diluted share. In the comparable period of 2007, net income was $21 million, or $0.29 per diluted share.

During the fourth quarter of 2008, the Company recorded a non-cash goodwill impairment charge of $247 million ($219 million, net of tax). The Company’s annual goodwill impairment analysis indicated there was an impairment of goodwill in two of its reporting segments, the Americas and Europe, primarily due to a decline in the Company’s market capitalization and recent market turmoil. The impairment charge did not result in any cash expenditures and did not affect the Company’s cash position, cash flows from operating activities or availability under its credit facility.

Excluding goodwill impairment and restructuring charges, the Company would have reported net income of $17 million, or $0.27 per diluted share, in the fourth quarter of 2008. Excluding restructuring charges and integration costs, the Company would have reported net income of $24 million, or $0.33 per diluted share, in the fourth quarter of 2007.

Excluding goodwill impairment, restructuring charges and a discrete tax benefit related to a previously closed facility, the Company would have reported net income of $82 million, or $1.22 per diluted share, in 2008. Excluding restructuring charges, integration costs and a discrete tax benefit related to a previously closed facility, the Company would have reported net income of $94 million, or $1.29 per diluted share, in 2007.

“The deterioration in end markets which began earlier in the year accelerated in the fourth quarter,” said Cary T. Fu, the Company’s Chief Executive Officer. “While 2009 will present significant challenges and uncertainties, we are confident that our customer centric business model, our focus on cost controls and our strong cash position will keep us in an excellent competitive position to manage through this downturn and subsequently benefit from its recovery.”

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 (loss) and earnings (loss) 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 (loss) 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 “while 2009 will present significant challenges and uncertainties, we are confident that our customer centric business model, our focus on cost controls and our strong cash position will keep us in an excellent competitive position to manage through this downturn and subsequently benefit from its recovery” and our sales and diluted earnings per share, excluding restructuring charges, guidance for the first quarter of 2009, 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 December 31,					Year Ended December 31,
	2008			2007		2008			2007

Income (loss) from operations (GAAP)	$	(231,924	)	$	21,326	$	(166,480	)	$	90,299
Goodwill impairment		247,482			—		247,482			—
Restructuring charges and integration costs		2,527			4,580		2,780			11,581
Non-GAAP income from operations	$	18,085		$	25,906	$	83,782		$	101,880


Net income (loss) (GAAP)	$	(203,738	)	$	20,629	$	(135,632	)	$	92,356
Goodwill impairment, net of tax		218,904			—		218,904			—
Restructuring charges and integration costs, net of tax		2,266			3,080		2,494			8,291
Income tax benefit		—			—		(3,440	)		(6,481	)
Non-GAAP net income	$	17,432		$	23,709	$	82,326		$	94,166


Numerator for basic earnings (loss) per share - net income (loss) (GAAP)	$	(203,738	)	$	20,629	$	(135,632	)	$	92,356
Interest expense on convertible debt, net of tax		—			—		—			147
Numerator for diluted earnings (loss) per share (GAAP)	$	(203,738	)	$	20,629	$	(135,632	)	$	92,503

Diluted Earnings (loss) per share (GAAP)	$	(3.13	)	$	0.29	$	(2.02	)	$	1.27

Numerator for basic earnings per share - net income (Non-GAAP)	$	17,432		$	23,709	$	82,326		$	94,166
Interest expense on convertible debt, net of tax		—			—		—			147
Numerator for diluted earnings per share (Non-GAAP)	$	17,432		$	23,709	$	82,326		$	94,313

Diluted earnings per share (Non-GAAP)	$	0.27		$	0.33	$	1.22		$	1.29

Weighted average shares used in calculating earnings (loss) per share:
Diluted - GAAP		65,173			71,555		67,060			72,829
Diluted - Non-GAAP		65,406			71,555		67,528			72,829

	Three Months Ended December 31,						Year Ended December 31,

	2008			2007			2008			2007

Net sales	$	581,770		$	734,547		$	2,590,167		$	2,915,919
Cost of sales		540,989			683,490			2,414,231			2,717,425

Gross profit		40,781			51,057			175,936			198,494

Selling, general and administrative expenses		22,254			24,704			90,372			94,826
Amortization of intangibles		442			447			1,782			1,788
Goodwill impairment		247,482			—			247,482			—
Restructuring charges and integration costs		2,527			4,580			2,780			11,581

Income (loss) from operations		(231,924	)		21,326			(166,480	)		90,299

Other income (expense):
Interest income		1,766			3,662			8,675			11,217
Interest expense		(353	)		(397	)		(1,455	)		(2,183	)
Other income (expense)		224			(885	)		1,772			693
Total other income, net		1,637			2,380			8,992			9,727

Income (loss) before income taxes		(230,287	)		23,706			(157,488	)		100,026

Income tax benefit (expense)		26,549			(3,077	)		21,856			(7,670	)

Net income (loss)	$	(203,738	)	$	20,629		$	(135,632	)	$	92,356

Numerator for basic earnings (loss) per share - net income (loss)	$	(203,738	)	$	20,629		$	(135,632	)	$	92,356
Interest expense on convertible debt, net of tax		—			—			—			147
Numerator for diluted earnings (loss) per share	$	(203,738	)	$	20,629		$	(135,632	)	$	92,503

Denominator for basic earnings per share - weighted average number of common shares outstanding during the period		65,173			71,309			67,060			72,061
Incremental common shares attributable to restricted shares and the exercise of outstanding equity instruments		—			246			—			768
Denominator for diluted earnings (loss) per share		65,173			71,555			67,060			72,829
Earnings (loss) per share:
Basic	$	(3.13	)	$	0.29		$	(2.02	)	$	1.28
Diluted	$	(3.13	)	$	0.29		$	(2.02	)	$	1.27

Assets

Current assets:
Cash and cash-equivalents	$	359,694
Accounts receivable, net		422,058
Inventories, net		343,163
Other current assets		39,466
Total current assets		1,164,381

Long-term investments		48,162
Non-current deferred tax asset		21,487
Property, plant and equipment, net		142,844
Other assets, net		24,398
Goodwill, net		37,912

Total assets	$	1,439,184

Liabilities and Shareholders’ Equity

Current liabilities:
Current installments of capital lease obligations	$	256
Accounts payable		288,045
Accrued liabilities		54,219
Total current liabilities		342,520

Capital lease obligations, less current installments		11,683
Other long-term liabilities		29,252
Shareholders’ equity		1,055,729

Total liabilities and shareholders’ equity	$	1,439,184

DONALD F. ADAM
CHIEF FINANCIAL OFFICER	January 5, 2009
(979) 849-6550