SCOTTSDALE, Ariz., July 24, 2018 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the second quarter ended June 30, 2018.
On January 1, 2018, we adopted new accounting guidance, FASB ASC Topic 606 "Revenue from Contracts with Customers" (ASC 606), relating to revenue recognition. We adopted ASC 606 using the full retrospective transition method. Accordingly, we have adjusted prior period information to be consistent with ASC 606. The adoption of ASC 606 did not materially impact our overall financial position.
A reconciliation of GAAP and non-GAAP results is included below.
"On balance, we met our commitments for the second quarter. Bookings grew to $177 million and were above our target mix; revenue was up 7% year-over-year; and cash cycle days of 69 were at the lower end of our target range. During the quarter, we navigated through a number of medical transitions and made meaningful progress in addressing program ramp challenges. While our operating margin profile was lower than expected from higher computing revenue, results were in line with our expectations," said Paul Tufano, Benchmark's President and CEO.
"Over the past 90 days, we have completed our ASR program and year-to-date have repurchased $78 million worth of stock, which puts us on track to exceed our $100 million target for the year. We also refinanced and expanded our credit facilities to a combined total of $650 million, which will be accretive to earnings on an annual basis."
"Our guidance for the third quarter of 2018 reflects our continuing improvement in operational execution and revenue expansion, but is tempered by softness in the semi-cap market."
Capital Allocation Highlights
- Accelerated Share Repurchase (ASR) Program completed on July 18 reducing common shares outstanding by 1.7 million shares.
- Completed expansion of credit facilities to $650 million from $430 million on July 20.
- Extended maturity date of credit facilities to July 2023.
Cash Conversion Cycle
Second Quarter 2018 Industry Sector Update
Revenue and percentage of sales by industry sector (in millions) was as follows.
Higher-value markets were up 6% year-over-year from stronger demand in Test & Instrumentation and new Medical program ramps. Traditional market revenues were up 8% year-over-year primarily from strong storage demand.
Second Quarter 2018 Bookings Update
- New program bookings of $177 million at the midpoint of projected annualized revenue.
- 25 engineering awards supporting early engagement opportunities.
- 25 manufacturing wins across all market sectors.
The Company projects that new program bookings for the second quarter will result in annualized revenue of $148 to $205 million when fully launched in the next 12-24 months, medical up to 36 months. The new program bookings align with Benchmark's strategic focus.
Third Quarter 2018 Outlook
- Revenue between $610 - $650 million.
- Diluted GAAP earnings per share between $0.19 - $0.26.
- Diluted non-GAAP earnings per share between $0.28 - $0.36 (excluding any additional impact related to U.S. Tax Reform, restructuring charges and other costs, amortization of intangibles and the write-off of existing deferred financing charges).
Second Quarter 2018 Results Conference Call Details
A conference call hosted by Benchmark management will be held today at 5:00 p.m. Eastern Time to discuss the Company's financial results and outlook. This call will be broadcast via the internet and may be accessed by logging on to the Company's website at www.bench.com .
About Benchmark Electronics, Inc.
Benchmark provides worldwide engineering services, integrated technology solutions and manufacturing services (both electronics manufacturing services (EMS) and precision machining services) to original equipment manufacturers in the following industries: industrial controls, aerospace and defense, telecommunications, computers and related products for business enterprises, medical devices, and test and instrumentation. Benchmark's global operations include facilities in eight countries, and its common shares trade on the New York Stock Exchange under the symbol BHE.
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "estimate," "anticipate," "predict" and similar expressions, and the negatives thereof, often identify forward-looking statements, which are not limited to historical facts. Forward-looking statements include, among other things: guidance for 2018 results; projected annual revenues resulting from new program bookings; statements, express or implied, concerning future operating results or margins, the ability to generate sales and income or cash flow; and Benchmark's business and growth strategies and expected growth and performance. Although Benchmark believes these statements are based upon reasonable assumptions, they involve risks and uncertainties relating to operations, markets and the business environment generally. If one or more of these risks or uncertainties materializes, or underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Readers are advised to consult further disclosures on these risks and uncertainties, particularly in Item 1A, "Risk Factors", of the Company's Annual Report on Form 10-K for the year ended December 31, 2017 and in its subsequent filings with the Securities and Exchange Commission. All forward-looking statements included in this document are based upon information available to the Company as of the date of this document, and it assumes no obligation to update them.
All forward-looking statements included in this release are based upon information available to Benchmark as of the date hereof, and the Company assumes no obligation to update them.
Non-GAAP Financial Measures
This document includes certain financial measures that exclude items and therefore are not in accordance with U.S. generally accepted accounting principles ("GAAP"). A detailed reconciliation between GAAP results and results excluding special items ("non-GAAP") is included in the following tables attached to this document. Management discloses non-GAAP information to provide investors with additional information to analyze the Company's performance and underlying trends. Management uses non-GAAP measures that exclude certain items in order to better assess operating performance and help investors compare results with our previous guidance. The Company's non-GAAP information is not necessarily comparable to the non-GAAP information used by 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 a measure of the Company's profitability or liquidity. Readers should consider the types of events and transactions for which adjustments have been made.
For the three months ended June 30, 2017, the adoption of ASC 606 increased revenue by $2.7 million, operating income by $0.9 million, net income by $0.9 million and diluted earnings per share by $0.02. For the six months ended June 30, 2017, the adoption of ASC 606 decreased revenue by $5.9 million, operating income by $0.6 million, net income by $0.2 million and diluted earnings per share by $0.01.
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SOURCE Benchmark Electronics, Inc.