Benchmark Electronics Reports Second Quarter Results; Raises Full Year 2006 Guidance

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Benchmark Electronics, Inc., a leading contract manufacturing provider, announced sales of $749 million for the quarter ended <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />June 30, 2006, compared to $561 million for the same quarter last year. Second quarter net income was $27.5 million, or $0.42 per diluted share. In the comparable period last year, net income was $18.7 million, or $0.29 per diluted share. Excluding restructuring charges and the impact of stock-based compensation costs, the Company had net income before special items of $29.4 million, or $0.45 per diluted share, in the second quarter of 2006. All share and per share data appearing in this press release has been retroactively adjusted for the 3-for-2 stock split completed on April 3, 2006 to holders of record as of March 27, 2006.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

"We experienced a strong second quarter with solid year-to-date growth in each of the industry sectors that we serve. Our commitment and focus on improving our operational effectiveness will drive Benchmark's continued success," stated Benchmark's President and CEO Cary T. Fu.

Second Quarter 2006 Financial Highlights

     * Operating margin for the second quarter was 4.4% on a GAAP basis and

       was 4.7%, excluding restructuring charges and the impact of stock-based

       compensation expenses.

     * Cash flows provided by operating activities for the second quarter was

       $1.9 million.

     * Cash and short-term investments balance at June 30, 2006 of $282


     * No debt outstanding.

     * Accounts receivable balance at June 30, 2006 of $443 million;

       calculated days sales outstanding were 53 days.

     * Inventory of $481 million at June 30, 2006; inventory turns were 5.8


Third Quarter 2006 Guidance

Revenues for the third quarter of 2006 are expected to be between $710 million and $750 million. Diluted earnings per share for the third quarter, excluding restructuring charges and the impact of stock-based compensation expenses, are expected to be between $0.40 and $0.45.

Full Year 2006 Guidance

We are raising our full year guidance. Revenues for 2006 are now expected to be between $2.76 billion and $2.85 billion. The corresponding diluted earnings per share for 2006, excluding restructuring charges, the impact of stock-based compensation expenses and the first quarter tax benefit, are expected to be between $1.61 and $1.69.

Non-GAAP Financial Measures

This press release includes financial measures for earnings and earnings per share that excludes certain items and therefore are not in accordance with 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. By disclosing this non-GAAP information, management intends to provide investors with additional information to further analyze the company's performance and underlying trends. Management utilizes a measure of net income and earnings per share on a non-GAAP basis that excludes certain items to better assess operating performance and to help investors compare our results with our previous guidance.

Non-GAAP information is not necessarily comparable to Non-GAAP information of 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 measures of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made.

Forward-Looking Statements

This news 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," "anticipate," "predict," and similar expressions, and the negatives of such expressions, are intended to identify forward-looking statements. Although Benchmark believes that these statements are based upon reasonable assumptions, such statements involve risks, uncertainties and assumptions, including but not limited to industry and economic conditions, customer actions and the other factors discussed in Benchmark's Form 10-K for the year ended December 31, 2005 and its other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.

Benchmark Electronics, Inc. is in the business of manufacturing electronics and provides its services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment, testing and instrumentation products, and telecommunication equipment. Benchmark's global operations include facilities in seven countries. Benchmark's Common Shares trade on the New York Stock Exchange under the symbol BHE.

A conference call hosted by Benchmark management will be held today at 10:00 am (Central time) to discuss the financial results of the Company and its future outlook. This call will be broadcast via the Internet and may be accessed by logging on to our website at .



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