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Benchmark Electronics, Inc. today announced financial results for the first quarter ended March 31, 2017.
"I am pleased by the Company's strong performance in our first quarter, providing an excellent start to the year. Revenues and margins exceeded guidance, and this quarter marks the first quarter in the past eleven that we experienced year-on-year revenue growth. Non-GAAP EPS of $0.34 exceeded the high end of our guidance by $0.06; cash cycle days improved by 7 days to 67 days; and we generated operating cash flow of $78 million," said Paul Tufano, Benchmark's President and CEO.
"As we work to transform and reposition the Company in 2017 to achieve our business model objectives, we remain focused on the key initiatives critical to our success, namely the optimization of our global network; the implementation of our market-sector sales organization; and the expansion of our engineering and solutions capabilities," added Tufano. "Our recent announcement to relocate our corporate headquarters to the Phoenix metropolitan area is a major step in advancing these initiatives. Arizona offers great access to a highly skilled talent pool, a pro-business climate and proximity to major research universities. This move will allow us to consolidate our headquarters staff and drive greater efficiency and speed; expand our engineering and solutions capabilities and establish a partnership with Arizona State University; position us closer to our growing aerospace and defense customer base and serve as a foundation to expand our existing precision technology business."
First Quarter 2017 Financial Highlights
- Operating margin was 2.2% (non-GAAP 3.8%).
- The Company incurred a $5.1 million charge ($0.10 per share) for the write-down of inventory and provisions to accounts receivable associated with the insolvency of a customer. These charges increased cost of sales by $3.4 million and SG&A by $1.7 million and are reflected as a non-GAAP adjustment.
- Cash flows from operating activities were $78 million.
- Cash conversion cycle improved 7 days from 74 at December 31, 2016 to 67 days at March 31, 2017.
- Cash was $752 million at March 31, of which $93 million was available in the U.S.
Overall revenue increased 3% year-over-year driven by strong Test & Instrumentation growth serving the semi-capital equipment market, Aerospace and Defense (A&D) growth primarily from defense programs, and Computing strength from new and existing customers. To reflect our increasing emphasis on A&D as part of our overall strategy, we will now report this sector separately going forward.
Medical demand was muted by softness across several top customers, and Industrials remains challenged by broad-based demand softness in energy and infrastructure related products.
First Quarter 2017 Bookings Update
- New program bookings of $118 to $149 million.
- 21 engineering awards supporting early engagement opportunities.
- 27 manufacturing wins across all market sectors.
The Company projects that new program bookings for the first quarter will result in annualized revenue of $118 to $149 million when fully launched in the next 12-18 months. The new program bookings align with Benchmark's strategic focus on higher-value markets.
Second Quarter 2017 Outlook
- Revenue between $565 - $585 million.
- Diluted GAAP earnings per share between $0.26 - $0.30.
- Diluted non-GAAP earnings per share between $0.31 - $0.35 (excluding restructuring charges and amortization of intangibles expected to approximate $0.05 per share). The income tax impact of the non-GAAP adjustments using the applicable effective tax rates is $0.03 per share.
About Benchmark Electronics, Inc.
Benchmark provides worldwide integrated electronics manufacturing services (EMS), engineering and design services, and precision machine 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.