Reading time ( words)
Benchmark Electronics Inc. has reported a revenue of $604 million for the third quarter ended September 30, 2017. Operating margin was at 3.4%, while the quarterly EPS was $0.35 ($0.39 non-GAAP).
"I am pleased by the company's performance in the third quarter, meeting or exceeding each of our commitments. Revenues exceeded our guidance and marked the third consecutive quarter that we experienced year-on-year revenue growth. Non-GAAP EPS of $0.39 exceeded the high-end of our guidance by $0.03; cash cycle days ended at 72, within our target range, and an eight-day improvement from the year ago period; and we achieved 9.9% ROIC, a 40 bps quarter‐over‐quarter improvement," said Paul Tufano, Benchmark's president and CEO.
"As we work to reposition the company 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. "The transition of our headquarters to the Phoenix area is substantially complete, and we are making progress on our operational excellence and customer care initiatives. Our market-sector sales focus and incremental go-to-market investments are beginning to yield results as reflected in our third quarter bookings, which were above the $150 million level for the first time in 12 quarters."
"We continue to emphasize our engineering-led customer engagements including the recent announcement that Benchmark was named Qualcomm Life's partner to commercialize their new product line of interconnected biometric sensors and to be the FDA manufacturer of record," said Tufano. "We will work with Qualcomm to have the device ready for FDA submission in 2018 with a goal of commercial availability to customers next year. This engagement is a pivotal milestone, which reinforces our engineering-led solutions business model and supports our ongoing IoT investment strategy."
"Today, we also announce with mixed emotions that Don Adam, Chief Financial Officer, will be retiring from the company. Don has determined that a permanent relocation to Phoenix would not be in the best interest of his family and will be departing by the end of the year. A search for his successor is currently underway," said Tufano. "Don has been a devoted Benchmark employee for the past 15 years and has been invaluable to me this past year as we have formulated plans to transform Benchmark. We are indebted to Don for his service and wish him all the best in his future endeavors."
Third Quarter 2017 Financial Highlights
- Operating margin was 3.4% (non-GAAP 4.1%).
- Cash conversion cycle improved 8 days from 80 at September 30, 2016 to 72 days at September 30, 2017.
- Cash was $730 million at September 30, of which $75 million was available in the U.S.
Third Quarter 2017 Bookings Update
- New program bookings of $138 to $165 million.
- 14 engineering awards supporting early engagement opportunities.
- 31 manufacturing wins across all market sectors.
The company projects that new program bookings for the third quarter will result in annualized revenue of $138 million to $165 million when fully launched in the next 12-18 months. The new program bookings align with Benchmark's strategic focus on higher-value markets.
Fourth Quarter 2017 Outlook
- Revenue between $590 - $610 million.
- Diluted GAAP earnings per share between $0.29 - $0.33.
- Diluted non-GAAP earnings per share between $0.34 - $0.38 (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 $0.02 per share.
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.