Exhibit 99.1
Press Release
For More Information, Call:
GAYLA J. DELLY |
|
CHIEF FINANCIAL OFFICER | FEBRUARY 5, 2004 |
(979) 849-6550 |
|
FOR IMMEDIATE RELEASE
BENCHMARK ELECTRONICS REPORTS
EARNINGS FOR FOURTH QUARTER 2003
REVENUE AND EARNINGS EXCEED GUIDANCE
ANGLETON, TX, FEBRUARY 5, 2004 – Benchmark Electronics, Inc., (NYSE: BHE) a leading contract manufacturing provider, announced sales revenue of $487 million for the quarter ended December 31, 2003, compared to $468 million for the same quarter in the prior year and $455 million for the third quarter of 2003. Fourth quarter net income was $13.4 million, compared to $12.7 million for the same quarter in the prior year and $12.9 million for the third quarter of 2003. Diluted earnings per share was $0.32 for the fourth quarter of 2003, compared to $0.33 for the fourth quarter of 2002 and $0.32 for the third quarter of 2003. Excluding a special item of $2.8 million ($1.9 million net of tax) in restructuring charges, the Company had net income before special items of $15.3 million, or $0.36 cents per diluted share, in the fourth quarter of 2003.
Sales revenue for the year ended December 31, 2003 was $1.8 billion, a 13% increase from $1.6 billion of revenue in the previous year. Net income for the year ended December 31, 2003 was $55.4 million, compared to $35.9 million for the prior year. Diluted earnings per share was $1.39 for the year ended December 31, 2003, compared to $1.01 per share in the prior year. Excluding two special items, an $8.1 million ($5.4 million net of tax) contract settlement gain and $2.8 million ($1.9 million net of tax) in restructuring charges, the Company had net income before special items of $51.9 million, or $1.31 per diluted share, for the year ended December 31, 2003.
“We are pleased to report another quarter and another year of strong results with growth in both revenues and profitability. We look forward to the opportunities for further growth in 2004 with the expansion of our customer base and improving business conditions,” commented Cary T. Fu, President of Benchmark Electronics, Inc.
Fourth Quarter 2003 Financial Highlights
• Cash balance at December 31, 2003 of $356 million.
• Total debt outstanding down to $21.0 million at December 31, 2003.
• Accounts receivable increased by $6 million during the quarter to $209 million.
• Calculated days sales outstanding decreased to 39 days for the quarter.
• Inventories increased by $30 million during the quarter to $239 million.
• Inventory turns decreased to 7.5 from 8.0 in the previous quarter.
• Completed 3-for-2 stock split on November 13, 2003. All share and per share data appearing in this press release have been retroactively adjusted for the stock split.
First Quarter 2004 Guidance
• Revenue in the first quarter of 2004 is expected to be between $470 million and $485 million.
• Earnings per share for the first quarter of 2004 are expected to be $0.33 to $0.37 per diluted share.
Non-GAAP Financial Measures
This press release includes financial measures for earnings and earnings per share that excludes 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. Benchmark’s guidance for the fourth quarter of 2003 did not include the impact of closing our Scotland facility during the fourth quarter of 2003. Accordingly, we are providing information in this earnings release which adds back the costs associated with the closing of our Scotland facility to net income. This allows investors to more readily compare the fourth-quarter results with our previous guidance, and with the earnings in accordance with generally accepted accounting principles (GAAP) reported in previous quarters.
Non-GAAP information is not necessarily comparable to 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. Although the Company 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, customer actions and the other factors discussed in Benchmark’s Form 10-K for the year ended December 31, 2002 and its other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.
Benchmark Electronics, Inc. is in the business of manufacturing electronics and provides its services to original equipment manufacturers of computers and related products for business enterprises, medical devices, video/audio/entertainment products, industrial control equipment, testing and instrumentation products, and telecommunication equipment. Benchmark’s global operations include facilities in eight countries. Benchmark’s Common Stock trades on the New York Stock Exchange under the symbol BHE.
A conference call hosted by Benchmark management will be held today at 10:00 am CST 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.
###
Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(UNAUDITED)
|
| Three Months Ended |
| Year Ended |
| |||||
|
| 2003 |
| 2002 |
| 2003 |
| 2002 |
| |
|
|
|
|
|
|
|
|
|
| |
Net sales |
| $ | 487,051 |
| 468,179 |
| 1,839,821 |
| 1,630,020 |
|
Cost of sales |
| 446,277 |
| 431,513 |
| 1,689,548 |
| 1,505,166 |
| |
|
|
|
|
|
|
|
|
|
| |
Gross profit |
| 40,774 |
| 36,666 |
| 150,273 |
| 124,854 |
| |
|
|
|
|
|
|
|
|
|
| |
Selling, general and administrative expenses |
| 15,732 |
| 16,625 |
| 64,976 |
| 64,191 |
| |
Contract settlement |
| — |
| — |
| (8,108 | ) | — |
| |
Restructuring charge |
| 2,815 |
| — |
| 2,815 |
| — |
| |
Asset write-offs |
| — |
| — |
| — |
| 1,608 |
| |
|
|
|
|
|
|
|
|
|
| |
Operating income |
| 22,227 |
| 20,041 |
| 90,590 |
| 59,055 |
| |
|
|
|
|
|
|
|
|
|
| |
Other income (expense): |
|
|
|
|
|
|
|
|
| |
Interest expense |
| (819 | ) | (2,807 | ) | (7,714 | ) | (11,385 | ) | |
Other |
| (1,501 | ) | 1,753 |
| 134 |
| 7,296 |
| |
Total other expense, net |
| (2,320 | ) | (1,054 | ) | (7,580 | ) | (4,089 | ) | |
|
|
|
|
|
|
|
|
|
| |
Income before income taxes |
| 19,907 |
| 18,987 |
| 83,010 |
| 54,966 |
| |
|
|
|
|
|
|
|
|
|
| |
Income tax expense |
| 6,498 |
| 6,282 |
| 27,574 |
| 19,073 |
| |
|
|
|
|
|
|
|
|
|
| |
Net income |
| $ | 13,409 |
| 12,705 |
| 55,436 |
| 35,893 |
|
|
|
|
|
|
|
|
|
|
| |
Numerator for basic earnings per share - net income |
| 13,409 |
| 12,705 |
| 55,436 |
| 35,893 |
| |
Interest expense on 6% convertible debt, net of tax |
| — |
| 805 |
| 2,180 |
| — |
| |
Numerator for diluted earnings per share |
| $ | 13,409 |
| 13,510 |
| 57,616 |
| 35,893 |
|
|
|
|
|
|
|
|
|
|
| |
Denominator for basic earnings per share - weighted average number of common shares outstanding during the period |
| 40,649 |
| 36,425 |
| 38,124 |
| 34,404 |
| |
Incremental common shares attributable to exercise of outstanding dilutive options |
| 1,529 |
| 1,294 |
| 1,291 |
| 1,194 |
| |
Incremental common shares attributable to conversion of 6% convertible debt |
| — |
| 2,993 |
| 2,017 |
| — |
| |
Denominator for diluted earnings per share |
| 42,178 |
| 40,712 |
| 41,432 |
| 35,598 |
| |
|
|
|
|
|
|
|
|
|
| |
Earnings per share: |
|
|
|
|
|
|
|
|
| |
Basic |
| $ | 0.33 |
| 0.35 |
| 1.45 |
| 1.04 |
|
Diluted |
| $ | 0.32 |
| 0.33 |
| 1.39 |
| 1.01 |
|
Benchmark Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
December 31, 2003
(Amounts in Thousands)
(UNAUDITED)
Assets |
|
|
| |
|
|
|
| |
Current assets: |
|
|
| |
Cash |
| $ | 356,140 |
|
Accounts receivable, net |
| 208,810 |
| |
Inventories, net |
| 238,629 |
| |
Other current assets |
| 28,113 |
| |
|
|
|
| |
Total current assets |
| 831,692 |
| |
|
|
|
| |
Property, plant and equipment, net |
| 85,265 |
| |
Other assets, net |
| 7,603 |
| |
Goodwill, net |
| 114,503 |
| |
|
|
|
| |
Total assets |
| $ | 1,039,063 |
|
|
|
|
| |
Liabilities and Shareholders’ Equity | ||||
Current liabilities: |
|
|
| |
Current installments of other long-term debt |
| $ | 21,017 |
|
Accounts payable |
| 268,034 |
| |
Other current liabilities |
| 77,787 |
| |
|
|
|
| |
Total current liabilities |
| 366,838 |
| |
|
|
|
| |
Other long-term debt, excluding current installments |
| 11 |
| |
Other long-term liabilities |
| 7,889 |
| |
|
|
|
| |
Shareholders’ equity |
| 664,325 |
| |
|
|
|
| |
Total liabilities and shareholders’ equity |
| $ | 1,039,063 |
|
Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statement of Income – Excluding Special Items
Three Months Ended December 31, 2003
(Amounts in Thousands)
(UNAUDITED)
|
| As |
| Special Items |
| Before |
| ||
|
|
|
|
|
|
|
| ||
Net sales |
| $ | 487,051 |
|
|
| 487,051 |
| |
Cost of sales |
| 446,277 |
|
|
| 446,277 |
| ||
|
|
|
|
|
|
|
| ||
Gross profit |
| 40,774 |
|
|
| 40,774 |
| ||
|
|
|
|
|
|
|
| ||
Selling, general and administrative expenses |
| 15,732 |
|
|
| 15,732 |
| ||
Restructuring charge |
| 2,815 |
| (2,815 | ) | — |
| ||
|
|
|
|
|
|
|
| ||
Operating income |
| 22,227 |
| 2,815 |
| 25,042 |
| ||
|
|
|
|
|
|
|
| ||
Other income (expense): |
|
|
|
|
|
|
| ||
Interest expense |
| (819 | ) |
|
| (819 | ) | ||
Other |
| (1,501 | ) |
|
| (1,501 | ) | ||
Total other expense, net |
| (2,320 | ) |
|
| (2,320 | ) | ||
|
|
|
|
|
|
|
| ||
Income before income taxes |
| 19,907 |
| 2,815 |
| 22,722 |
| ||
|
|
|
|
|
|
|
| ||
Income tax expense |
| 6,498 |
| 919 |
| 7,417 |
| ||
|
|
|
|
|
|
|
| ||
Net income |
| $ | 13,409 |
| 1,896 |
| 15,305 |
| |
|
|
|
|
|
|
|
| ||
Earnings per share: |
|
|
|
|
|
|
| ||
Basic |
|
|
|
|
| $ | 0.38 |
| |
Diluted |
|
|
|
|
| $ | 0.36 |
| |
|
|
|
|
|
|
|
| ||
Weighted average number of shares outstanding: |
|
|
|
|
|
|
| ||
Basic |
|
|
|
|
| 40,649 |
| ||
Diluted |
|
|
|
|
| 42,178 |
| ||
Benchmark Electronics, Inc. and Subsidiaries
Consolidated Statement of Income – Excluding Special Items
Year Ended December 31, 2003
(Amounts in Thousands)
(UNAUDITED)
|
| As |
| Special Items |
| Before |
| ||
|
|
|
|
|
|
|
| ||
Net sales |
| $ | 1,839,821 |
|
|
| 1,839,821 |
| |
Cost of sales |
| 1,689,548 |
|
|
| 1,689,548 |
| ||
|
|
|
|
|
|
|
| ||
Gross profit |
| 150,273 |
|
|
| 150,273 |
| ||
|
|
|
|
|
|
|
| ||
Selling, general and administrative expenses |
| 64,976 |
|
|
| 64,976 |
| ||
Contract settlement |
| (8,108 | ) | 8,108 |
| — |
| ||
Restructuring charge |
| 2,815 |
| (2,815 | ) | — |
| ||
|
|
|
|
|
|
|
| ||
Operating income |
| 90,590 |
| (5,293 | ) | 85,297 |
| ||
|
|
|
|
|
|
|
| ||
Other income (expense): |
|
|
|
|
|
|
| ||
Interest expense |
| (7,714 | ) |
|
| (7,714 | ) | ||
Other |
| 134 |
|
|
| 134 |
| ||
Total other expense, net |
| (7,580 | ) |
|
| (7,580 | ) | ||
|
|
|
|
|
|
|
| ||
Income before income taxes |
| 83,010 |
| (5,293 | ) | 77,717 |
| ||
|
|
|
|
|
|
|
| ||
Income tax expense |
| 27,574 |
| (1,758 | ) | 25,816 |
| ||
|
|
|
|
|
|
|
| ||
Net income |
| $ | 55,436 |
| (3,535 | ) | 51,901 |
| |
|
|
|
|
|
|
|
| ||
Numerator for basic earnings per share – net income |
|
|
|
|
| $ | 51,901 |
| |
Interest expense on 6% convertible debt, net of tax |
|
|
|
|
| 2,180 |
| ||
Numerator for diluted earnings per share |
|
|
|
|
| $ | 54,081 |
| |
|
|
|
|
|
|
|
| ||
Denominator for basic earnings per share – weighted average number of common shares outstanding during the period |
|
|
|
|
| 38,124 |
| ||
Incremental common shares attributable to exercise of outstanding dilutive options |
|
|
|
|
| 1,291 |
| ||
Incremental common shares attributable to conversion of 6% convertible debt |
|
|
|
|
| 2,017 |
| ||
Denominator for diluted earnings per share |
|
|
|
|
| 41,432 |
| ||
|
|
|
|
|
|
|
| ||
Earnings per share: |
|
|
|
|
|
|
| ||
Basic |
|
|
|
|
| $ | 1.36 |
| |
Diluted |
|
|
|
|
| $ | 1.31 |
| |
