SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999 COMMISSION FILE
NUMBER: 1-10560
BENCHMARK ELECTRONICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 74-2211011
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NUMBER)
3000 TECHNOLOGY DRIVE 77515
ANGLETON, TEXAS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(409) 849-6550
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
As of July 28, 1999 there were 15,214,663 shares of Common Stock, par
value $0.10 per share, outstanding.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BENCHMARK ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents ..................................... $ 44,863 $ 23,077
Accounts receivable, net ...................................... 87,932 57,179
Income taxes receivable ....................................... 581 1,120
Inventories ................................................... 90,437 53,718
Prepaid expenses and other assets ............................. 4,723 1,897
Deferred tax asset ............................................ 2,515 2,488
--------- ---------
Total current assets ................................... 231,051 139,479
--------- ---------
Property, plant and equipment, at cost .......................... 95,922 80,826
Accumulated depreciation ........................................ (42,838) (35,264)
--------- ---------
Net property, plant and equipment ...................... 53,084 45,562
--------- ---------
Other assets, net ............................................... 9,513 7,948
Goodwill, net ................................................... 47,087 48,907
--------- ---------
$ 340,735 $ 241,896
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt ............................. $ 19 $ 8,200
Accounts payable .............................................. 53,392 37,046
Accrued liabilities ........................................... 9,378 7,968
--------- ---------
Total current liabilities .............................. 62,789 53,214
Long term debt, less current portion ............................ 30,111 46,111
Deferred income taxes ........................................... 4,697 4,570
Shareholders' equity:
Preferred shares, $0.10 par value; 5,000,000 shares
authorized, none issued ..................................... -- --
Common shares, $0.10 par value; 30,000,000 shares
authorized; issued - 15,248,017 and 11,676,967, respectively;
outstanding - 15,198,533 and 11,627,483, respectively ....... 1,520 1,162
Additional paid-in capital .................................... 164,296 70,159
Retained earnings ............................................. 77,442 66,800
Less treasury shares, at cost; 49,484 shares .................. (120) (120)
--------- ---------
Total shareholders' equity ............................. 243,138 138,001
Commitments and contingencies .................................
--------- ---------
$ 340,735 $ 241,896
========= =========
See accompanying notes to condensed consolidated financial statements.
2
BENCHMARK ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- --------------------------
1999 1998 1999 1998
--------- --------- --------- ---------
Sales ..................................................... $ 162,621 $ 132,636 $ 309,167 $ 240,682
Cost of sales ............................................. 145,767 119,955 277,623 217,096
--------- --------- --------- ---------
Gross profit ................................... 16,854 12,681 31,544 23,586
Selling, general and administrative expense ............... 5,677 4,465 10,628 7,991
Amortization of goodwill .................................. 910 906 1,819 1,492
--------- --------- --------- ---------
Income from operations ......................... 10,267 7,310 19,097 14,103
Interest expense .......................................... (1,190) (1,286) (2,315) (2,188)
Interest income ........................................... 128 55 266 223
Other income (expense) .................................... (394) 12 (316) 61
--------- --------- --------- ---------
Income before income taxes ..................... 8,811 6,091 16,732 12,199
Income tax expense ........................................ 3,206 2,356 6,090 4,721
--------- --------- --------- ---------
Net income ..................................... $ 5,605 $ 3,735 $ 10,642 $ 7,478
========= ========= ========= =========
Earnings per share:
Basic .......................................... $ 0.44 $ 0.32 $ 0.87 $ 0.65
Diluted ........................................ $ 0.41 $ 0.31 $ 0.80 $ 0.61
========= ========= ========= =========
Weighted average number of shares outstanding:
Basic .......................................... 12,756 11,581 12,209 11,578
Diluted ........................................ 13,789 12,099 13,256 12,199
========= ========= ========= =========
See accompanying notes to condensed consolidated financial statements.
3
BENCHMARK ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
------------------------
1999 1998
-------- --------
Cash flows from operating activities:
Net income ............................................................ $ 10,642 $ 7,478
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization expense ............................. 10,173 8,074
Deferred income taxes ............................................. 100 869
(Gain) loss on sale of property, plant and equipment .............. (61) 4
Tax benefit of employee stock options exercised ................... 261 34
Amortization of premiums on marketable securities ................. -- 46
Changes in operating assets and liabilities, net of
effects from acquisitions:
Accounts receivable ............................................... (30,753) 1,752
Inventories ....................................................... (478) 8,248
Prepaid expenses and other assets ................................. (2,824) 142
Accounts payable .................................................. 16,346 (10,011)
Accrued liabilities ............................................... 1,410 526
Income taxes ...................................................... 539 (976)
-------- --------
Net cash provided by operations ............................... 5,355 16,186
-------- --------
Cash flows from investing activities:
Capital expenditures, net ............................................. (9,787) (4,574)
Additions to capitalized software ..................................... (1,373) --
Redemption of marketable securities ................................... -- 11,385
Acquisitions, net of cash acquired .................................... (42,310) (70,680)
-------- --------
Net cash used in investing activities ......................... (53,470) (63,869)
-------- --------
Cash flows from financing activities:
Net proceeds from stock offering ...................................... 93,694 --
Debt issuance costs ................................................... (152) (390)
Proceeds from issuance of debt ........................................ 25,000 40,000
Proceeds from exercise of employee stock options ...................... 540 114
Principal payments on long-term debt .................................. (49,181) (4,085)
-------- --------
Net cash provided by financing activities ..................... 69,901 35,639
-------- --------
Net increase (decrease) in cash and cash equivalents .................... 21,786 (12,044)
Cash and cash equivalents at beginning of year ........................ 23,077 21,029
-------- --------
Cash and cash equivalents at June 30 .................................. $ 44,863 $ 8,985
======== ========
Supplemental disclosures of cash flow information:
Income taxes paid ..................................................... $ 5,241 $ 4,793
======== ========
Interest paid ......................................................... $ 2,449 $ 1,501
======== ========
See accompanying notes to condensed consolidated financial statements.
4
BENCHMARK ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
Benchmark Electronics, Inc. (the Company) is a Texas corporation which
provides electronics manufacturing and design services to original equipment
manufacturers (OEMs) in select industries, including enterprise computer,
telecommunications, medical device, industrial control and testing
instrumentation.
The condensed consolidated financial statements included herein have been
prepared by the Company without audit pursuant to the rules and regulations of
the Securities and Exchange Commission. The financial statements reflect all
normal and recurring adjustments which in the opinion of management are
necessary for a fair presentation of the financial position, results of
operations and cash flows for the interim periods presented. The results of
operations for the periods presented are not necessarily indicative of the
results to be expected for the full year. The accompanying unaudited condensed
consolidated financial statements should be read in conjunction with the
financial statements and notes included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1998.
NOTE 2 - EARNINGS PER SHARE
Basic earnings per share is computed using the weighted average number of
shares outstanding. Diluted earnings per share is computed using the weighted
average number of shares outstanding adjusted for the incremental shares
attributed to outstanding stock options to purchase common stock. Incremental
shares of 1,046,888 and 621,591 for the six months ended June 30, 1999 and 1998,
respectively, and 1,032,971 and 518,571 for the three months ended June 30, 1999
and 1998, respectively, were used in the calculation of diluted earnings per
share. Options to purchase 372,000 and 147,000 shares of common stock for the
three and six-month periods ended June 30, 1998, were not included in the
computation of diluted earnings per share because the option exercise price was
greater than the average market price of the common stock.
NOTE 3 - BORROWING FACILITIES
In order to finance a portion of the cash consideration for the
acquisition of EMD Technologies, Inc. (EMD) on July 30, 1996, the Company issued
a $30 million, 8.02% Senior Note due 2006 (the Senior Note) to Northwestern
Mutual Life Insurance Company. The Senior Note is unsecured and guaranteed by
each of the Company's United States subsidiaries. Principal on the Senior Note
is payable in annual installments of $5.0 million beginning July 31, 2001 with a
final installment on the unpaid principal amount due July 31, 2006. Interest on
the Senior Note is payable semi-annually on January 31 and July 31. The purchase
agreement relating to the Senior Note (the Purchase Agreement) includes
customary affirmative and negative covenants and restricts the ability of the
Company to incur additional debt and to pay dividends. Upon any prepayment of
all or a portion of the Senior Note, the Company is obligated to pay the holder
a premium on the amount prepaid. The Purchase Agreement contains a provision
that in the event of a change of control (defined generally to mean the
acquisition by a person or group (as defined in the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder) of beneficial
ownership of more than 50% of the total voting power of the outstanding voting
stock of the Company), the Company must offer to repurchase the Senior Note at
par plus any prepayment penalty. As of June 30, 1999, the Company had $30
million outstanding under the Senior Note.
5
In connection with the acquisition of Lockheed Commercial Electronics
Company (LCEC) on February 23, 1998, the Company obtained $40 million through
borrowings under a five-year term loan (the Term Loan) with a commercial bank.
In June 1999, the Company repaid all amounts outstanding under the Term Loan
with the proceeds from a public offering of the Company's common stock. See Note
8.
The Company has a $65 million revolving line of credit with a commercial
bank. The Company is entitled to borrow under the line of credit up to the
lesser of $65 million or the sum of 75% of its eligible accounts receivable and
25% of its eligible inventories. Interest on the line of credit is payable
quarterly, at the Company's option, at either the bank's Eurodollar rate plus
.88% to 1.63% or its prime rate. A commitment fee of 0.20% to 0.30% per annum on
the unused portion of the line of credit is payable quarterly in arrears. The
line of credit agreement contains certain financial covenants and restricts the
ability of the Company to incur additional debt without the consent of the bank
and to pay dividends. The line of credit matures on March 31, 2004. As of June
30, 1999, the Company had no borrowings outstanding under this line of credit
and $65 million was available for future borrowings.
NOTE 4 - INVENTORIES
Inventory costs are summarized as follows:
JUNE 30, DECEMBER 31,
1999 1998
----------- -----------
Raw materials ................ $63,914,000 $39,230,000
Work in process .............. 26,523,000 14,488,000
----------- -----------
$90,437,000 $53,718,000
NOTE 5 - INCOME TAXES
Income tax expense consists of the following:
SIX MONTHS ENDED
JUNE 30,
---------------------------
1999 1998
---------- ----------
Federal - Current .................. $4,995,000 $3,406,000
Foreign - Current .................. 315,000 --
State - Current .................... 680,000 446,000
Federal/State - Deferred ........... 100,000 869,000
---------- ----------
Total ......................... $6,090,000 $4,721,000
========== ==========
Income tax expense differs from the amount computed by applying the U.S.
federal statutory income tax rate to pretax income due to the impact of
nondeductible amortization of goodwill, foreign income taxes, state income
taxes, net of federal benefit and the benefit from the use of a foreign sales
corporation and non-taxable interest earned on municipal investments.
The Company considers earnings from its foreign subsidiary to be
indefinitely reinvested and, accordingly, no provision for U.S. federal and
state income taxes has been made for these earnings. Upon distribution of
foreign subsidiary earnings in the form of dividends or otherwise, the Company
would be subject to U.S. income taxes (subject to adjustment for foreign tax
credits).
In addition, for a period of up to ten years the Company will be subject
to taxes in Ireland at rates substantially less than the statutory tax rates for
that jurisdiction. As a result of these
6
reduced rates, income tax expense for the three and six-months ended June 30,
1999 is approximately $69,000 and $79,000 (approximately $.01 per share),
respectively, lower than the amount computed by applying the statutory tax
rates.
NOTE 6 - NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 establishes methods of
accounting for derivative financial instruments and hedging activities related
to those instruments as well as other hedging activities. The Company currently
does not hold or issue derivative financial instruments in the normal course of
business. Accordingly, based on the Company's operations at June 30, 1999,
adoption of SFAS No. 133 as of January 1, 2001 is not expected to affect the
Company's consolidated financial statements.
In April 1998, the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position (SOP) 98-5, "Reporting on the Costs of
Start-up Activities." SOP 98-5 requires all start-up costs related to new
operations be expensed as incurred. In addition, all start-up costs that were
capitalized in the past must be expensed when SOP 98-5 is adopted. The adoption
of SOP 98-5 as of January 1, 1999 did not have a material impact on the
Company's financial position, results of operations or liquidity.
NOTE 7 - ACQUISITIONS
On March 1, 1999, the Company acquired certain equipment and inventories
from Stratus Computer Ireland (Stratus), a wholly-owned subsidiary of Ascend
Communications, Inc. (Ascend) for approximately $42.3 million in cash, as
adjusted. The acquisition price was allocated $6.1 million to equipment and
other assets, and $36.2 million to inventories. Stratus provided systems
integration services for large and sophisticated fault-tolerant mainframe
computers. In connection with the transaction, the Company entered into a
three-year supply agreement to provide these system integration services to
Ascend and Stratus Holdings Limited and the Company hired approximately 260
employees. In conjunction with the purchase of the Stratus assets, the Company
increased its revolving line of credit to $65 million and borrowed $25 million.
On February 23, 1998, the Company completed its acquisition of LCEC for
$70 million in cash. LCEC, situated in Hudson, New Hampshire, provides a broad
range of services including printed circuit board assembly and test, system
assembly and test, prototyping, depot repair, materials procurement, and
engineering support services. The transaction was accounted for under the
purchase method of accounting, and, accordingly, the results of operations of
LCEC since February 23, 1998 have been included in the accompanying condensed
consolidated statements of income. The acquisition resulted in goodwill of
approximately $29.5 million that is being amortized on a straight-line basis
over 15 years.
7
NOTE 8 - STOCK OFFERING
On June 3, 1999, the Company issued 3,525,000 shares of common stock in a
public offering for net proceeds of approximately $93.7 million. The net
proceeds to the Company from the offering have been used to repay indebtedness
outstanding under the Company's bank credit facility, its Term Loan and for
working capital and other general corporate purposes.
NOTE 9 - BUSINESS SEGMENTS AND GEOGRAPHIC AREAS
The Company currently operates in two reportable operating segments
Systems Integration and Box Build and Printed Circuit Boards. The Systems
Integration and Box Build operating segment is located in the Company's Ireland
facility and manufactures high-end computer systems for customers. Prior to the
acquisition of the Stratus equipment and inventories the Company had only one
operating segment.
The measurement of profit or loss currently used to evaluate the results
of operations for the operating segments is income (loss) before income taxes
and unallocated corporate overhead. Sales between operating segments for the six
months ended June 30, 1999 consisted of sales of printed circuit boards to the
Systems Integration and Box Build segment and totaled $18.2 million.
Transactions between segments are recorded at cost plus an applicable margin.
SIX MONTHS ENDED
JUNE 30,
1999
Net sales to external customers:
Systems Integration and Box Build .................. $ 54,359
Printed Circuit Boards ............................. 254,808
---------
Total ...................................... $ 309,167
=========
Income (loss) before income taxes:
Systems Integration and Box Build .................. $ 3,153
Printed Circuit Boards ............................. 14,134
Unallocated corporate overhead ..................... (555)
---------
Total ...................................... $ 16,732
=========
Total assets as of June 30, 1999:
Systems Integration and Box Build .................. $ 64,253
Printed Circuit Boards ............................. 265,211
Corporate .......................................... 11,271
---------
Total ...................................... $ 340,735
=========
The Company currently has international operations in Ireland. For the six month
period ended June 30, 1999, the Company's domestic sales totaled $254.8 million
and its sales in Ireland totaled $54.4 million. During the six months ended June
30, 1999, the Company had export sales of approximately $10.4 million to
Ireland, $261,000 to France, $210,000 to Canada, $19,000 to Japan, $10,000 to
Singapore, and $11,000 to Australia. During the six months ended June 30, 1998,
the Company had export sales of approximately $45.4 million to Ireland, $422,000
to France, $991,000 to Canada, $20,000 to Japan, and $22,000 to Singapore.
8
NOTE 10 - SUBSEQUENT EVENT
On July 2, 1999, the Company and J.M. Huber Corporation ("Seller")
announced they had entered into a stock purchase agreement providing for the
Company to acquire all of the outstanding capital stock of AVEX Electronics,
Inc. and a wholly owned subsidiary of Seller to be formed for the purpose of
succeeding to the ownership of certain non-U.S. holding and operating companies
which currently are owned by another entity owned by Seller (collectively,
AVEX). AVEX has manufacturing plants or design centers in the United States in
Huntsville, Alabama and Pulaski, Tennessee, and elsewhere in Campinas, Brazil,
Csongrad, Hungary, Guadalajara, Mexico, Cork, Ireland, Singapore, East Kilbride,
Scotland, and Katrineholm, Sweden. In consideration of the capital stock of
AVEX, the Company has agreed to pay $255 million in cash (less any indebtedness
assumed), subject to certain adjustments, including a working capital
adjustment, and to issue one million shares of Common Stock to the Seller. In
order to finance the AVEX acquisition, the Company has secured (i) a commitment
letter from a commercial bank for a revolving credit facility of up to $100
million and a term loan in the amount of $75 million, and (ii) a commitment
letter from another commercial bank for a term loan in the amount of $125
million. On August 2, 1999, the Company announced its intention to engage in a
capital markets transaction. If the Company receives $125 million in gross
proceeds from the capital markets transaction, the second term loan will not be
funded. The Company expects to close this transaction by the end of August 1999.
The AVEX acquisition is to be accounted for using the purchase method of
accounting.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations contains certain forward-looking statements regarding
future financial condition and results of operations and the Company's business
operations. We have based these statements on our expectations about future
events. The words "expect," "estimate," "anticipate," "predict" and similar
expressions are intended to identify forward-looking statements. Such statements
involve risks, uncertainties and assumptions. Important factors that could cause
actual results to differ materially from the forward-looking statements include,
without limitation, the integration of the operations of LCEC and the assets in
Ireland purchased from Stratus; completion of the pending acquisition of AVEX;
integration of the operations of AVEX; the loss of a major customer; changes in
customer concentration; the absence of long term sales contracts; dependence on
the growth of the enterprise computer, telecommunications, medical device,
industrial control, and testing and instrumentation industries; risks associated
with our international operations; availability of customer specified
components; dependence on certain key executives; Year 2000 problems;
fluctuations in quarterly results; stock price volatility; and competition from
other providers of electronics manufacturing services. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual outcomes may vary materially from those indicated.
GENERAL
We are a leading provider of electronics manufacturing services (EMS). On
July 2, 1999, we announced our intention to acquire AVEX Electronics, Inc. and
certain related companies (collectively, AVEX), one of the largest
privately-held contract manufacturers. This acquisition is significant because
we believe it will place us in the top tier of EMS providers by giving us a
global presence with 14 facilities in 8 countries and a sales base of
approximately $1.4 billion on a
9
pro forma basis for 1998. This acquisition expands our customer base to
approximately 90 original equipment operators (OEMs) in a broader range of end
user markets. Following the AVEX acquisition, we will service OEMs in the
telecommunications, enterprise computer and peripherals, high-end
video/audio/entertainment, computer and medical device, industrial control, and
testing and instrumentation markets.
With the AVEX acquisition, we will offer OEMs a turnkey EMS solution, from
initial product design to volume production and direct order fulfillment. We
provide advanced engineering services including product design, printed circuit
board (PCB) layout, quick-turn prototyping and test development. We believe that
the AVEX acquisition will allow us to complement our strengths in the
manufacturing process for large, complex, high-density assemblies with AVEX's
ability to manufacture high and low volume products in lower cost regions such
as Latin America, Eastern Europe and Southeast Asia. As OEM's expand
internationally, they are increasingly requiring their EMS partners to have
strategic regional locations and global procurement abilities. We believe a
global manufacturing solution increases our ability to be responsive to our
customers' needs by providing accelerated time-to-market and time-to-volume
production of high quality products. These enhanced capabilities should enable
us to build stronger strategic relationships with our customers and to become a
more integral part of their operations.
Substantially all of our manufacturing services are provided on a turnkey
basis, whereby we purchase customer-specified components from our suppliers,
assemble the components on finished PCBs, perform post-production testing and
provide our customer with production process and testing documentation. We offer
our customers flexible, "just-in-time" delivery programs allowing product
shipments to be closely coordinated with our customers' inventory requirements.
In certain instances, we complete the assembly of our customers' products at our
facilities by integrating printed circuit board assemblies into other elements
of our customers' products. We also provide manufacturing services on a
consignment basis, whereby we, utilizing components provided by the customer,
provide only assembly and post-production testing services. We currently operate
a total of 39 surface mount production lines at our facilities in Angleton,
Texas; Beaverton, Oregon; Hudson, New Hampshire; Winona, Minnesota; and Dublin,
Ireland.
Sales are recognized at the time products are shipped to customers and may
vary depending on the timing of customers' orders, product mix and availability
of component parts. Substantially all of our business is performed on a turnkey
basis, which involves the procurement of component parts. The gross profit
margin for such materials is generally lower than the gross profit associated
with the manufacturing process and other value-added services.
We do not typically obtain long-term purchase orders or commitments from
our customers. Instead we work with our customers to develop forecasts for
future orders, which are not binding. Customers may cancel their orders, change
their orders, change production quantities from forecast volumes or delay
production for a number of reasons beyond our control. Cancellations, reductions
or delays by a significant customer or by a group of customers would have an
adverse effect on us. In addition, as many of our costs and operating expenses
are relatively fixed, a reduction in customer demand can adversely affect our
gross margins and operating income.
A substantial percentage of our sales have been made to a relatively small
number of customers, and the loss of a major customer would adversely affect us.
During the six months ended June 30, 1999, our three largest customers each
represented in excess of 10% our sales and together represented 50.7% of the
Company's sales. We expect to continue to depend on the sales from our largest
customers and any material delay, cancellation or reduction of orders from these
10
or other significant customers would have a material adverse effect on our
results of operations. We are dependent on the continued growth, viability and
financial stability of our customers, some of which operate in industries that
are, to a varying extent, subject to technological change, vigorous competition
and short product life cycles. When our customers are adversely affected by
these factors, we may be similarly affected.
We have made two significant acquisitions in the last eighteen months, and
a total of three significant acquisitions since 1996. The pending acquisition of
AVEX represents our fourth significant acquisition and is much larger than any
of our prior acquisitions. In addition, we may acquire the stock or assets of
other companies in the future. The integration of acquired operations requires
substantial management, financial and other resources and involves a number of
risks and challenges, including:
o Potential loss of key employees or customers of the acquired companies;
o Diversion of management's attention;
o Increased expenses and working capital requirements; and
o Increased exposure to Year 2000 and other risks, including the
integration of different information systems.
The difficulties of integrating acquired businesses may be further complicated
by size and geographic distances. Our most recent acquisition was in Dublin,
Ireland, and we may make an acquisition in the Far East. During the integration
process, other parts of our business could be disrupted and the financial
performance of our business could be adversely affected. Our success is
dependent upon our ability to integrate the pending AVEX acquisition and other
acquisitions we may make in the future, with our existing operations. Additional
expansion or acquisitions would require investment of financial resources and
may require debt or equity financing which could dilute our shareholders'
interest in us. No assurance can be given that we will consummate any
acquisitions in the future, or that any debt or equity financing required for
future acquisitions will be available on terms acceptable to us.
The following discussion should be read in conjunction with the unaudited
financial statements of the Company included elsewhere in this report.
PENDING AND RECENT ACQUISITIONS
On July 2, 1999, we announced an agreement with J.M. Huber
Corporation ("the Seller"), which provides for the acquisition of AVEX and
certain related companies from the Seller. As consideration for the acquisition,
the Company has agreed to pay the Seller $255 million in cash, less debt assumed
and subject to certain adjustments, and to issue to the Seller one million
shares of Benchmark's Common Stock. Completion of the acquisition of AVEX is
subject to certain conditions. See Note 10 of Notes to Condensed Consolidated
Financial Statements.
On March 1, 1999, we acquired certain assets from Stratus Computer Ireland
(Stratus), a wholly-owned subsidiary of Ascend Communications, Inc. (Ascend) for
approximately $42.3 million in cash, as adjusted. The acquisition price was
allocated $6.1 million to equipment and other assets, and $36.2 million to
inventories. Stratus provided systems integration services for large and
sophisticated fault-tolerant mainframe computers. In connection with the
transaction, the Company entered into a three-year supply agreement to provide
these system integration services to Ascend and Stratus Holdings Limited and the
Company hired approximately 260 employees. In conjunction with the purchase of
the Stratus assets, the Company increased its revolving line of
11
credit to $65 million and borrowed $25 million. See Note 3 and Note 7 of Notes
to Condensed Consolidated Financial Statements.
On February 23, 1998, we acquired LCEC for $70 million in cash. LCEC,
situated in Hudson, New Hampshire, was one of New England's largest electronics
manufacturing services companies, providing a broad range of services including
printed circuit board assembly and test, system assembly and test, prototyping,
depot repair, materials procurement, and engineering support services. The
transaction was accounted for under the purchase method of accounting, and,
accordingly, the results of operations of LCEC since February 23, 1998 have been
included in the Company's financial statements. The acquisition resulted in
goodwill of approximately $29.5 million that is being amortized on a
straight-line basis over 15 years. See Note 7 of Notes to Condensed Consolidated
Financial Statements. In connection with the acquisition of LCEC, the Company
obtained $40 million through borrowings under a five-year Term Loan with a
commercial bank. See Note 3 of Notes to Condensed Consolidated Financial
Statements and "Liquidity and Capital Resources".
The inclusion of LCEC's operations and the operations of the system
integration facility in Ireland in the Company's accounts are responsible for a
substantial portion of the variations in the results of the Company's operations
(including components thereof) from period to period. The effects of the
acquisitions of the Stratus assets and LCEC on the Company's financial condition
and its reported results of operations should be considered when reviewing the
financial information contained herein.
The acquisition of AVEX will constitute a significant expansion of the
Company's operations. Accordingly, the potential effect of the AVEX acquisition
on the Company's future financial condition, liquidity and future results of
operations should be considered when reviewing the historical financial
information and related discussions set forth in the following section.
RESULTS OF OPERATIONS
The following table presents the percentage relationship that certain
items in the Company's Condensed Consolidated Statements of Income bear to sales
for the periods indicated:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ -------------------------
1999 1998 1999 1998
-------- --------- --------- ---------
Sales ............................................. 100.0% 100.0% 100.0% 100.0%
Cost of sales ..................................... 89.6 90.4 89.8 90.2
----- ----- ----- -----
Gross profit ........................... 10.4 9.6 10.2 9.8
Selling, general and administrative expense ....... 3.5 3.4 3.4 3.3
Amortization of goodwill .......................... 0.6 0.7 0.6 0.7
----- ----- ----- -----
Income from operations ................. 6.3 5.5 6.2 5.9
Interest expense .................................. (0.8) (0.9) (0.7) (0.9)
Interest income ................................... 0.1 0.0 0.0 0.1
Other income (expense) ............................ (0.2) 0.0 (0.1) 0.0
----- ----- ----- -----
Income before income taxes ............. 5.4 4.6 5.4 5.1
Income tax expense ................................ 2.0 1.8 2.0 2.0
----- ----- ----- -----
Net income ............................. 3.4% 2.8% 3.4% 3.1%
===== ===== ===== =====
12
Sales for the second quarter of 1999 were approximately $162.6 million, a
22.6% increase from sales of approximately $132.6 million for the same quarter
in 1998. Sales for the first six months of 1999 were approximately $309.2
million, a 28.5% increase from sales of $240.7 million for the same period of
1998. The net increases in sales resulted primarily from the acquisition of
LCEC, the operation of the system integration facility in Ireland, existing
customers, and the addition of new customers. The Company's results of
operations are dependent upon the success of its customers, and a prolonged
period of reduced demand for its customers' products would have an adverse
effect on the Company's business. During the six months ended June 30, 1999, the
Company's three largest customers each represented in excess of 10% of our sales
and represented 50.7% of the Company's sales in the aggregate. The loss of a
major customer, if not replaced, would adversely affect the Company.
Gross profit increased 32.9% to approximately $16.9 million in the second
quarter of 1999 from approximately $12.7 million in the same quarter in 1998.
Gross profit increased 33.7% to $31.5 million during the first six months of
1999 from $23.6 million for the same period in 1998. The increases in gross
profit were due primarily to the higher sales volumes attributable to the LCEC
acquisition and the operation of the new system integration facility in Ireland,
along with changes in product and customer mix occurring in the ordinary course
of business. Gross profit as a percentage of sales increased from 9.6% for the
second quarter of 1998 to 10.4% for the second quarter of 1999. Gross profit as
a percentage of sales increased from 9.8% for the first six months of 1998 to
10.2% for the first six months of 1999. The Company's gross margin reflects a
number of factors, including product mix, the level of start up costs and
efficiencies associated with new programs, capacity utilization of surface mount
and other equipment, and pricing within the electronics industry. All of these
factors are continually changing and are interrelated, making it impracticable
to determine with precision the separate effect of each factor. The Company
attributes the increase in gross profit as a percentage of sales during the
quarter and six months ended June 30, 1999, as compared to the same periods in
1998, to improved capacity utilization.
Selling, general and administrative expenses were $5.7 million in the
second quarter of 1999, an increase of 27.2% from $4.5 million for the same
quarter in 1998. Selling, general and administrative expenses were $10.6 million
for the first six months of 1999, an increase of 33.0% from $8.0 million for the
same period in 1998. Selling, general and administrative expenses as a
percentage of sales increased from 3.4% for the second quarter of 1998 to 3.5%
for the second quarter of 1999. Selling, general and administrative expenses
increased from 3.3% for the first six months of 1998 to 3.4% of sales for the
six months ended June 30, 1999. In order to satisfy the increased level of
business activity and to continue the development and improvement of the systems
and processes necessary to accommodate future growth, the Company has continued
to add personnel. The increases in selling, general and administrative expenses
during the quarter and six months ended June 30, 1999 reflect these additional
personnel and related departmental expense, as well as the additional
administrative expenses resulting from the inclusion of LCEC for a full
six-month period in 1999 and the inclusion of the systems integration facility
from March 1, 1999. The Company anticipates selling, general and administrative
expenses will continue to increase in nominal terms as the Company continues to
build the internal management and support systems necessary to support higher
sales levels and the integration of AVEX.
The amortization of goodwill for the three and six-month periods ended
June 30, 1999 was $910,000 and $1,819,000, respectively, compared to $906,000
and $1,492,000, respectively for the same periods of 1998. The increases are
attributable to the acquisition of LCEC on February 23, 1998.
13
Interest expense for the quarters ended June 30, 1999 and 1998 was $1.2
million and $1.3 million, respectively. The modest decrease was due to the
repayment of the Term Loan in June 1999. For the six months ended June 30, 1999,
interest expense increased to $2.3 million from $2.2 million for the same period
in 1998, as a result of the additional debt incurred in connection with the
purchase of the assets in Ireland from Stratus on March 1, 1999 and the
acquisition of LCEC on February 23, 1998.
Interest income was approximately $128,000 and $55,000, respectively, for
the three-month periods ended June 30, 1999 and 1998, and approximately $266,000
and $223,000, respectively, for the six-month periods ended June 30, 1999 and
1998. The increase in interest income was due to the interest earned on cash
equivalents from the proceeds of the public offering of the Company's common
stock in June 1999.
Other income declined from approximately $12,000 during the three months
ended June 30, 1998 to a loss of approximately $394,000 during the same period
in 1999. Similarly, other income declined from approximately $61,000 during the
six months ended June 30, 1998 to a loss of approximately $316,000 during the
same period in 1999. The decreases during 1999 were due to foreign exchange
losses incurred by the Company.
Income tax expense for the three-month periods ended June 30, 1999 and
1998 was $3.2 million and $2.4 million, respectively. Income tax expense for the
six-month periods ended June 30, 1999 and 1998 was $6.1 million and $4.7
million, respectively. The increase was due to higher pretax income and
nondeductible amortization of goodwill, partially offset by lower foreign tax
rates applicable to a portion of pretax income in 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its growth and operations through funds generated
from operations, proceeds from the sale of its common stock and funds borrowed
under its credit facilities.
Cash provided by operating activities was $5.4 million and $16.2 million
for the six months ended June 30, 1999 and 1998, respectively. The decrease in
cash provided by operations was primarily the result of increases in accounts
receivable and inventories partially offset by increases in net income,
depreciation and amortization, accounts payable and accrued liabilities. The
Company's accounts payable, accounts receivable, and inventories have increased
$16.3 million, $30.8 million, and $0.5 million (net of effects from purchase of
assets from Stratus), respectively, during the first six months of 1999,
reflecting the Company's increased sales and backlog as compared to the
corresponding period in the prior year. The Company is continuing the practice
of purchasing components only after customer orders are received, which
mitigates, but does not eliminate, the risk of loss on inventories. Supplies of
electronic components and other materials used in operations are subject to
industry-wide shortages. In certain instances, suppliers may allocate available
quantities to the Company that may not meet Company requirements. The Company
has not experienced significant supply constraints in the recent past.
Cash used in investing activities was $53.4 million and $63.9 million for
the six months ended June 30, 1999 and 1998, respectively. On March 1, 1999, the
Company completed the purchase of inventories and equipment from Stratus for
$42.3 million in cash. See Note 7 of Notes to Condensed Consolidated Financial
Statements. Capital expenditures of $9.8 million for the six
14
months ended June 30, 1999, were primarily concentrated in test and computer
equipment. Capitalized software costs of $1.4 million for the six months ended
June 30, 1999, were for the implementation of the Company's Enterprise Resource
Planning System.
Cash provided by financing activities was $69.9 million and $35.6 million
for the six months ended June 30, 1999 and 1998, respectively. In connection
with the purchase of the assets from Stratus on March 1, 1999, the Company
increased its revolving line of credit to $65 million and borrowed $25 million.
In June 1999, the Company completed a public offering of 3,525,000 shares of its
common stock and used a portion of the net proceeds of $93.7 million to repay
borrowings under the bank credit facilities. The Company made principal payments
on long-term debt totaling $49.1 million during the six months ended June 30,
1999.
The Company has a $65 million revolving line of credit with a commercial
bank. The Company is entitled to borrow under the line of credit up to the
lesser of $65 million or the sum of 75% of its eligible accounts receivable and
25% of its eligible inventories. Interest on the line of credit is payable
quarterly, at the Company's option, at either the bank's Eurodollar rate plus
.88% to 1.63% or its prime rate. A commitment fee of 0.20% to 0.30% per annum on
the unused portion of the line of credit is payable quarterly in arrears. The
line of credit agreement contains certain financial covenants and restricts the
ability of the Company to incur additional debt without the consent of the bank
and to pay dividends. The line of credit matures on March 31, 2004. As of June
30, 1999, the Company had no borrowings outstanding under this line of credit.
The Company's operations, and the operations of businesses it acquires,
are subject to certain foreign, federal, state and local regulatory requirements
relating to environmental, waste management, health and safety matters. The
Company believes it operates in substantial compliance with all applicable
requirements and the Company seeks to ensure that newly acquired businesses
comply or will comply substantially with applicable requirements. However,
material costs and liabilities may arise from these requirements or from new,
modified or more stringent requirements in the future. In addition, past,
current and future operations may give rise to claims of exposure by employees
or the public, or to other claims or liabilities relating to environmental,
waste management or health and safety concerns.
The Company may require additional capital to finance further enhancements
to or acquisitions or expansions of its manufacturing capacity. Management
believes that the level of working capital will continue to grow at a rate
generally consistent with the growth of the Company's operations. Although no
assurance can be given that future financing will be available on terms
acceptable to the Company, the Company may seek additional funds from time to
time through public or private debt or equity offerings or through bank
borrowings to the extent permitted by its existing and contemplated debt
agreements.
The Company has signed an agreement to purchase AVEX. In connection with
this acquisition, the Company expects to incur $133 million in new bank debt,
which will replace its current revolving credit facility and the $30 million
Senior Note issued in connection with a prior acquisition. Additionally, the
Company expects to issue $125 million in aggregate principal amount of
convertible subordinated notes or to borrow additional bank debt in a like
amount. The new bank credit facility is expected to be secured by accounts
receivable and inventories and 100% of the capital stock of the Company's
domestic subsidiaries and 65% of its foreign subsidiaries and to contain
restrictions on the Company's ability to incur additional indebtedness and pay
dividends. If less than $125 million aggregate principal amount of convertible
subordinated notes are issued, the bank credit facility will also be secured by
substantially all of the Company's other assets.
15
Management believes that the existing cash balances, proceeds from the
sale of the convertible subordinated notes, funds generated from operations, and
borrowings under the Company's contemplated credit facility will be sufficient
to permit the Company to meet its liquidity requirements for the foreseeable
future. Management continually evaluates potential strategic acquisitions or
investments, but at the present time, aside from the AVEX acquisition, we have
no understandings, commitments or agreements with respect to any such
acquisition or investment.
Historically, the Company has not held or issued derivative financial
instruments in the normal course of business. However, the Company is exposed to
market risks, including changes in foreign currency exchange rates and interest
rates, which may adversely affect its results of operations and financial
position. In seeking to minimize the risks and/or costs associated with such
activities, the Company manages exposure to changes in interest rates by
balancing the amount of its borrowings between fixed rate and variable interest
rates. The Company manages its exposure to foreign currency exchange rates by
requiring customers to pay in U.S. dollars. Inflation and changing prices have
not significantly affected the Company's operating results or the markets in
which the Company performs services. Because of the international scope of
AVEX's operations and its history of hedging against foreign currency risk, upon
completion of the AVEX acquisition, the Company will consider the need to
initiate a foreign currency risk management program.
YEAR 2000 ISSUES
The Company recognizes that it must ensure that its products and
operations will not be adversely impacted by Year 2000 software failures which
can arise in date-sensitive software applications which utilize a field of two
digits rather than four to define a specific year. Absent corrective actions,
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in system failures or miscalculations
causing disruptions to various activities and operations.
STATE OF READINESS
Many of the Company's business and operating systems are currently Year
2000 compliant, and the Company initiated a review of those systems during 1997
to address those systems that are not currently Year 2000 compliant. Areas
addressed included major third-party suppliers of components of the Company's
products as well as full reviews of the Company's manufacturing equipment,
telephone and voice mail systems, security systems and other office support
systems. The Company has also initiated formal communications with significant
suppliers and customers to determine the extent to which the Company is
vulnerable to those third parties' failure to remediate their own Year 2000
issues. Based on its inquiries to date, the Company believes satisfactory
progress is being made by its significant suppliers and customers on Year 2000
issues. No significant information technology initiatives have been deferred by
the Company as a result of its Year 2000 project. All necessary Year 2000
upgrades of major systems, including those supplied by vendors, have been
identified and conversion strategies have been developed and are under
deployment.
16
In addition, the Company has selected Baan U.S.A., Inc. to provide an
Enterprise Resource Planning System, which will be Year 2000 compliant, to
improve processes and to increase efficiencies.
COSTS TO ADDRESS THE YEAR 2000 ISSUE
The estimated total cost to address the Company's Year 2000 issues,
including the cost associated with the new Enterprise Resource Planning System,
is approximately $13.5 million. Costs incurred and expected to be incurred
consist primarily of the cost of Company personnel involved in updating
applications and operating systems and the costs of software updates and patches
(many of which are provided free of charge from the vendors). The estimated
total cost associated with the purchase and implementation of the new Enterprise
Resource Planning System is approximately $13 million. The costs of this
software will be capitalized and amortized over the estimated useful life of the
software, and costs associated with the preliminary project stage and
post-implementation stage have been and will be expensed as incurred. The Year
2000 component of this system can not be readily segregated from the total cost
of the company-wide Enterprise Resource Planning System implementation. The
total amount expended on Year 2000 issues and the new Enterprise Resource
Planning System through June 30, 1999, is approximately $10.8 million, of which
$10.4 million related to the new Enterprise Resource Planning System
implementation and approximately $400,000 related to the cost of identifying and
communicating with third parties and installing software patches. The costs of
the Year 2000 process and the timetable on which the Company believes it will
complete any Year 2000 modifications are based on management's best estimates,
which are derived utilizing a number of assumptions of future events, including
the availability of certain resources and other factors. However, there can be
no guarantee that these estimates will be achieved and actual results could
differ materially from those anticipated. Specific factors that might cause such
material differences include, but are not limited to, the availability and cost
of personnel trained in this area, the ability to locate and correct all
relevant computer codes and similar uncertainties. In addition, there can be no
assurance that the systems of other companies on which the Company's systems
rely will be converted on a timely basis or that such failure by another company
to convert would not have an adverse effect on the Company's systems.
RISKS PRESENTED BY THE YEAR 2000 ISSUE
There is considerable uncertainty inherent in assessing the Company's
vulnerability to Year 2000 problems, arising in part from the uncertainty of the
Year 2000 readiness of the Company's suppliers and customers. It is possible
that the failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, certain normal business operations, and that
such failures could materially and adversely affect the Company's results of
operations, liquidity and financial condition. Based on the information
available to it, and subject to the effect of the general uncertainty on the
Company's ability to make a definitive determination, the Company does not
believe it has any material exposure to significant business interruption as a
result of the Year 2000 problem, or that the cost of remedial actions will have
a material adverse effect on its business, financial condition or results of
operations.
CONTINGENCY PLANS
The steps taken by the Company to address the Year 2000 issues are
expected to reduce significantly the Company's level of uncertainty about the
Year 2000 problem and, in particular,
17
about the Year 2000 compliance and readiness of its material third party
suppliers and customers. The Company believes that, with the completion of
identifying and communicating with third parties as scheduled, the possibility
of significant interruptions of normal operations should be reduced.
Accordingly, and as the program is on schedule to be completed during the
fall of 1999, the Company has not formulated a worst case scenario in the event
its Year 2000 project is not completed in a timely manner. The Company has a
contingency plan in place in the event all scheduled implementations are not
completed by the end of 1999. All necessary Year 2000 upgrades of major systems
and software patches, including those supplied by vendors, have been identified
and conversion strategies are under deployment.
AVEX ELECTRONICS, INC. YEAR 2000 PLAN
As described above, the Company has entered into an agreement to acquire
AVEX. AVEX has intitiated a Year 2000 Plan to identify, assess, and remediate
Year 2000 issues within each of its significant computer programs and certain
equipment which contain microprocessors. The plan anticipates that by the third
quarter of 1999 all phases will be complete. AVEX's current budget for the
remaining costs of remediation (including replacement software and hardware) and
testing, as set forth in the Year 2000 Plan, is $240,000. The cost and timing of
AVEX's Year 2000 Plan is subject to the same types of uncertainties as are
described for the Company's plan. Contingency plans are being developed in the
event any critical supplier or customer is not compliant.
We can offer no assurance of the status or completeness of AVEX's Year
2000 Plan. Should the AVEX Year 2000 Plan prove insufficient or not be completed
in a timely manner, it could result in a material adverse effect on our business
following the AVEX acquisition.
QUARTERLY RESULTS
Although management does not believe that the Company's business is
affected by seasonal factors, the Company's sales and earnings may vary from
quarter to quarter, depending primarily upon the timing of manufacturing orders.
Therefore, the Company's operating results for any particular quarter may not be
indicative of the results for any future quarter or for the year.
18
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has not held or issued derivative financial instruments in the
normal course of business. However, the Company is exposed to market risks,
including changes in foreign currency exchange rates and interest rates, which
may adversely affect its results of operations and financial position. In
seeking to minimize the risks and/or costs associated with such activities, the
Company manages exposure to changes in interest rates by balancing the amount of
its borrowings between fixed rate and variable interest rates. The Company
manages its exposure to foreign currency exchange rates by requiring customers
to pay in U.S. dollars.
Certain financial instruments used to obtain capital are subject to market
risks from fluctuations in interest rates. As of June 30, 1999, the Company has
$30.1 million of fixed rate debt and no variable rate debt. However, the pending
AVEX acquisition will substantially increase the Company's risk to changes in
interest rates. In addition, the Company has $47 million of cash equivalents
earning interest at variable rates.
The Company has a subsidiary located in the Republic of Ireland. The
Company predominantly conducts its foreign sales and purchase transactions in
U.S. dollars. Other currency exchange risks are primarily limited to current
liabilities payable in Irish pounds. Such amounts relate to foreign plant wages,
taxes and facility operating costs. Accordingly, the Company does not expect
that the effects of changes in currency exchange rates upon such non-U.S. dollar
transactions would be material. The Company does not currently hedge against
foreign currency translation risks and believes that foreign currency exchange
risk is not significant to its operations. However, the pending AVEX acquisition
will increase substantially the Company's foreign currency exchange risk.
Because of the international scope of AVEX's operations and its history of
hedging against foreign currency risk, upon completion of the AVEX acquisition,
the Company will consider the need to initiate a foreign currency risk
management program.
19
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) - (c) At the Annual Meeting of Shareholders held on May 11, 1999, the
Company's nominees for directors to serve until the 2000 Annual Meeting of
Shareholders were elected, the appointment of KPMG LLP as the independent
auditors for the Company for the fiscal year ending December 31, 1999 was
ratified, and the Company's Employee Stock Purchase Plan was adopted. With
respect to the election of directors, the voting was as follows:
NOMINEE FOR WITHHELD
--------- ------- ----------
John C. Custer 8,670,262 136,595
Donald E. Nigbor 8,663,808 143,049
Steven A. Barton 8,661,508 145,349
Cary T. Fu 8,661,608 145,249
Peter G. Dorflinger 8,673,562 133,295
Gerald W. Bodzy 8,672,662 134,195
David H. Arnold 8,663,808 143,049
With respect to the ratification of the appointment of KPMG LLP as the
independent auditors of the Company, the voting was as follows:
FOR AGAINST ABSTAIN
----- ---------- ---------
8,783,453 2,088 21,316
With respect to the adoption of the Company's Employee Stock Purchase Plan, the
voting was as follows:
FOR AGAINST ABSTAIN
------ --------- ---------
8,580,845 122,660 103,352
(d) Not applicable.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the three months ended
June 30, 1999.
20
SIGNATURES
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 thereunto duly authorized on August 2, 1999.
BENCHMARK ELECTRONICS, INC.
(Registrant)
By: /s/ DONALD E. NIGBOR
Donald E. Nigbor
President
(Principal Executive Officer)
By: /s/ CARY T. FU
Cary T. Fu
Executive Vice President
(Principal Financial Officer)
21
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
--------- ------------------------
27.1 Financial Data Schedule.