EX-99.1 2 ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

###

### BENCHMARK ELECTRONICS REPORTS RESULTS FOR THE

### QUARTER ENDED MARCH 31, 2014

ANGLETON, TX, APRIL 24, 2014 – Benchmark Electronics, Inc. (NYSE: BHE), a leading integrated contract manufacturing provider, today announced financial results for its first quarter.

|  |  | Three Months Ended |
|  |  | March 31, |  |  | December 31, |  |  | March 31, |
|  | 2014 |  |  | 2013 |  |  | 2013 |
Net sales (in millions) |  | $639 |  |  | $757 |  |  | $542 |
Net income (in millions) |  | $19 |  |  | $67 |  |  | $11 |
Net income – non-GAAP (in millions) |  | $19 |  |  | $24 |  |  | $12 |
Diluted EPS |  | $0.35 |  |  | $1.24 |  |  | $0.21 |
Diluted EPS – non-GAAP |  | $0.35 |  |  | $0.43 |  |  | $0.22 |
Operating margin (%) |  | 3.5 | % |  | 8.0 | % |  | 2.6 | %
Operating margin – non-GAAP (%) |  | 3.6 | % |  | 4.1 | % |  | 2.7 | %

“Benchmark again delivered strong performance, which allowed us to exceed our earnings expectations in the first quarter,” noted Gayla J. Delly, President and CEO. “Our focus on growth opportunities in the non‐traditional market sectors, coupled with operational excellence and enhanced customer solutions, resulted in improved year‐over‐year revenue and operating margins. Our strategy is delivering results and we expect to continue to expand margins and drive additional improvements throughout the year.”

First Quarter 2014 Highlights

· Revenue of $639 million increased 18% from Q1 2013.

· New program bookings in Q1 2014 were $135 million to $165 million.

· Restructuring and integration and acquisition-related costs totaled $2.1 million.

· Thailand flood related items include insurance recoveries of $1.6 million. The recovery process with our insurance carriers is complete.

· Cash flows provided by operating activities for Q1 2014 were approximately $61 million.

· Cash and cash equivalents balance was $394 million at March 31, 2014.

· Accounts receivable was $465 million at March 31, 2014; calculated days sales outstanding were 65 days compared to 67 days at December 31, 2013 and 69 days at March 31, 2013.

· Inventory was $443 million at March 31, 2014; inventory turns were 5.3 times compared to 7.0 at December 31, 2013 and 6.3 at March 31, 2013. Inventory increased in the first quarter to support new program ramps.

· Repurchases of common shares for the first quarter totaled $5 million or 196,000 shares.

· Non-GAAP operating margin for the first quarter was 3.6%.

· Income tax expense for Q1 2014 includes a $1.2 million discrete tax benefit ($0.02 per diluted share) as a result of a 2013 tax rate incentive received in China during the first quarter.

First Quarter Industry Sector Update

The following table sets forth revenue by industry sector for the quarters ended March 31, 2014, December 31, 2013 and March 31, 2013.

|  | March 31, |  | December 31, |  | March 31, |
|  | 2014 |  | 2013 |  | 2013 |
Computers and related products for business |  |  |  |  |  |
| enterprises | 20 | % | 32 | % | 25 | %
Industrial control equipment | 29 |  | 26 |  | 29 |
Telecommunication equipment | 27 |  | 24 |  | 26 |
Medical devices | 11 |  | 10 |  | 13 |
Testing and instrumentation products | 13 |  | 8 |  | 7 |
|  | 100 | % | 100 | % | 100 | %

Second Quarter 2014 Outlook

· Revenue between $665 and $700 million.

· Diluted earnings per share between $0.35 and $0.40 (excluding restructuring charges and integration costs).

Conference Call Details

A conference call hosted by Benchmark management will be held today at 10:00 am (Central Time) to discuss the financial results of the Company and its future outlook. This call will be broadcast via the internet and may be accessed by logging on to our website at www.bench.com.

About Benchmark Electronics, Inc.

Benchmark Electronics, Inc. provides integrated manufacturing, design and engineering services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment (which includes equipment for the aerospace and defense industry), testing and instrumentation products, and telecommunication equipment. Benchmark’s global operations include facilities in seven countries. Benchmark’s 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

979-849-6550 (ext. 1361) or lisa.weeks@bench.com

Non-GAAP Financial Measures

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

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,” “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 “our strategy is delivering results and we expect to continue to expand margins and drive additional improvements throughout the year”, our sales and diluted earnings per share (excluding special items) guidance for the second quarter of 2014, 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. Should one or more of these risks or uncertainties materialize, or should 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 of this release, and Benchmark assumes no obligation to update any such forward-looking statements. Readers are advised to consult further disclosures on related subjects in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, in its other filings with the Securities and Exchange Commission and in its press releases.

###

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, |
|  |  | 2014 |  | 2013 |  | 2013 |
Income from operations (GAAP) | $ | 22,432 | $ | 60,275 | $ | 13,993 |
Restructuring charges and integration |  |  |  |  |  |  |
and acquisition-related costs |  | 2,109 |  | 2,025 |  | 442 |
Thailand flood related items, net of insurance |  | (1,571) |  | (31,577) |  | - |
Non-GAAP income from operations | $ | 22,970 | $ | 30,723 | $ | 14,435 |
Net income (GAAP) | $ | 19,125 | $ | 67,489 | $ | 11,487 |
Restructuring charges and integration and |  |  |  |  |  |  |
acquisition-related costs, net of tax |  | 1,383 |  | 1,343 |  | 399 |
Thailand flood related items, net of insurance and tax |  | (1,263) |  | (27,810) |  | - |
Discrete US tax benefit |  | - |  | (17,500) |  | - |
Non-GAAP net income | $ | 19,245 | $ | 23,522 | $ | 11,886 |
Earnings per share: (GAAP) |  |  |  |  |  |  |
| Basic | $ | 0.36 | $ | 1.26 | $ | 0.21 |
| Diluted | $ | 0.35 | $ | 1.24 | $ | 0.21 |
Earnings per share: (Non-GAAP) |  |  |  |  |  |  |
| Basic | $ | 0.36 | $ | 0.44 | $ | 0.22 |
| Diluted | $ | 0.35 | $ | 0.43 | $ | 0.22 |
Weighted-average number of shares used |  |  |  |  |  |  |
in calculating earnings per share: |  |  |  |  |  |  |
| Basic |  | 53,650 |  | 53,773 |  | 54,796 |
| Diluted |  | 54,277 |  | 54,327 |  | 55,150 |

Benchmark Electronics, Inc. and Subsidiaries |
Consolidated Statements of Income |
(Amounts in Thousands, Except Per Share Data) |
(UNAUDITED) |
|  |  | Three Months Ended |
|  |  | March 31, |
|  | 2014 |  | 2013 |
Sales | $ | 639,344 | $ | 542,444 |
Cost of sales |  | 588,221 |  | 505,610 |
| Gross profit |  | 51,123 |  | 36,834 |
Selling, general and administrative expenses |  | 28,153 |  | 22,399 |
Restructuring charges and integration and acquisition-related costs |  | 2,109 |  | 442 |
Thailand flood related items, net of insurance |  | (1,571) |  | - |
| Income from operations |  | 22,432 |  | 13,993 |
Interest expense |  | (476) |  | (459) |
Interest income |  | 515 |  | 414 |
Other income, net |  | 26 |  | 316 |
| Income before income taxes |  | 22,497 |  | 14,264 |
Income tax expense |  | 3,372 |  | 2,777 |
| Net income | $ | 19,125 | $ | 11,487 |
Earnings per share: |  |  |  |  |
| Basic | $ | 0.36 | $ | 0.21 |
| Diluted | $ | 0.35 | $ | 0.21 |
Weighted-average number of shares used in calculating earnings per share: |  |  |  |  |
| Basic |  | 53,650 |  | 54,796 |
| Diluted |  | 54,277 |  | 55,150 |

Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
|  |  |  |  |  | March 31, |  | December 31,
|  |  |  |  |  | 2014 |  | 2013
|  |  |  |  |  | (unaudited) |  |
Assets |  |  |  |
| Current assets: |  |  |  |
|  | Cash and cash equivalents | $ | 394,194 | $ | 345,555
|  | Accounts receivable, net |  | 464,999 |  | 559,763
|  | Inventories, net |  | 443,203 |  | 396,699
|  | Other current assets |  | 40,222 |  | 40,816
|  |  |  | Total current assets |  | 1,342,618 |  | 1,342,833
| Long-term investments |  | 9,906 |  | 9,921
| Property, plant and equipment, net |  | 187,689 |  | 185,319
| Goodwill and other, net |  | 117,678 |  | 119,298
|  |  |  | Total assets | $ | 1,657,891 | $ | 1,657,371
Liabilities and Shareholders’ Equity |  |  |  |
| Current liabilities: |  |  |  |
|  | Current installments of capital lease obligations | $ | 605 | $ | 582
|  | Accounts payable |  | 299,715 |  | 320,953
|  | Accrued liabilities |  | 75,861 |  | 76,842
|  |  |  | Total current liabilities |  | 376,181 |  | 398,377
| Capital lease obligations, less current installments |  | 9,366 |  | 9,521
| Other long-term liabilities |  | 23,670 |  | 22,440
| Shareholders’ equity |  | 1,248,674 |  | 1,227,033
|  |  |  | Total liabilities and shareholders’ equity | $ | 1,657,891 | $ | 1,657,371