Benchmark Electronics Reports Second Quarter 2017 Results

SCOTTSDALE, Ariz., July 19, 2017 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the second quarter ended June 30, 2017.

A reconciliation of GAAP and non-GAAP results is included below.

"I am very pleased with our second quarter performance; the Company delivered on its commitments and posted strong operational results for the quarter.  Revenue exceeded guidance and reflected year-on-year growth for the second consecutive quarter.  Non-GAAP EPS of $0.38 exceeded the high end of our guidance by $0.03; cash cycle days ended at 65 days, well below our 70 day target; and we achieved 9.5% ROIC, a 50 bps quarter-over-quarter improvement," said Paul Tufano, Benchmark's President and CEO.

"We remain focused on the key initiatives to transform and reposition the Company to achieve our long-term business model objectives, namely the optimization of our global network, the implementation of our market-sector sales organization and the expansion of our engineering solutions capability," added Tufano.  "We are in the process of relocating our corporate headquarters to Arizona and anticipate that the majority of this move will be completed in the third quarter.  I am also very pleased to have Mike Buseman join us as our new head of Global Operations.  Under Mike's leadership, we will look to accelerate our initiatives related to operational excellence and customer experience.  Additionally, our market-sector sales focus is beginning to yield new customer growth, especially in our targeted higher-value markets, as reflected in our bookings for the quarter.  We continue to emphasize engineering-led customer engagements and are aggressively expanding our offerings to provide higher-value propositions to current and potential customers."

Second Quarter 2017 Financial Highlights

• Operating margin was 3.6% (non-GAAP 4.1%).
• Cash flows from operating activities were $15 million.
• Cash conversion cycle improved 18 days from 83 at June 30, 2016 to 65 days at June 30, 2017.
• Cash was $749 million at June 30, of which $92 million was available in the U.S.

Cash Conversion Cycle

Second Quarter 2017 Industry Sector Update
Revenue by industry sector (dollars in millions) was as follows.

Overall revenue increased 6% year-over-year driven by continued strong demand in Test & Instrumentation serving the semi-capital equipment market, Computing growth from existing storage and new security customers, and Aerospace and Defense (A&D) growth from defense programs. Industrials and Medical growth remained muted year-over-year from softness across several of our top customers.

Second Quarter 2017 Bookings Update

• New program bookings of $129 to $155 million.
• 14 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 $129 to $155 million when fully launched in the next 12-18 months.  The new program bookings align with Benchmark's strategic focus on higher-value markets.

Third Quarter 2017 Outlook

• Revenue between $575 - $595 million.
• Diluted GAAP earnings per share between $0.29 - $0.33.
• Diluted non-GAAP earnings per share between $0.32 - $0.36 (excluding restructuring charges and amortization of intangibles expected to approximate $0.03 per share). The income tax impact of the non-GAAP adjustments using the applicable effective tax rates is $0.03 per share.

Second Quarter 2017 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 integrated electronics manufacturing services (EMS), engineering and design services, 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 seven countries, and its common shares trade on the New York Stock Exchange under the symbol BHE.

Non-GAAP Financial Measures
This press release includes financial measures that exclude certain items and therefore do not follow 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.  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.  Benchmark'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.

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," "plan," "anticipate," "project," "predict," "goals," "targeting" and similar terms, and the negatives thereof, often identify forward-looking statements, which are not limited to historical facts.  The Company's forward-looking statements include, among other things, projections relating to the future value of bookings and third quarter 2017 revenues and diluted earnings per share.  Although Benchmark believes these statements are based upon reasonable assumptions, they involve risks and uncertainties relating to operations, markets and 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.

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.  Readers are advised to consult further disclosures on related subjects, particularly in Item 1A, "Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2016, in its other filings with the Securities and Exchange Commission and in its press releases.

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SOURCE Benchmark Electronics, Inc.