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Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the quarter ended June 30, 2015.
"Benchmark performed well, as evidenced by our 4.2% non-GAAP operating margin and revenue at the high end of our previously announced guidance range," said Gayla Delly, Benchmark's President and CEO. "Despite broad variability in end-market demand, consistent execution resulted in year-over-year revenue increases in the medical and test & instrumentation sectors where we have had strong new program bookings in the last 12 months. We also experienced higher demand during the quarter from computing and telecom customers."
"Second quarter new program bookings should result in annualized revenue of $110-130 million when fully launched within the next 12-18 months. Bookings again aligned well with our focus on early engineering engagement and long-term manufacturing solutions for customers in both higher growth and traditional markets."
"Benchmark returned $19 million to shareholders through share repurchases during the second quarter, and a total of $66 million over the last 12 months. We continue to have a strong balance sheet and the financial flexibility to simultaneously repurchase shares, reinvest in the business, and support strategic growth initiatives."
Delly concluded, "We remain focused on our key strategic priorities that drive value for our customers and shareholders, including diversification of our portfolio towards higher margin programs, strong execution linked to lean and operational initiatives, and working capital management. Our results this quarter show continued progress in each of these long-term objectives."
Second Quarter 2015 Financial Highlights
- Cash flows from operating activities were $52 million
- Cash and cash equivalents were $409 million at June 30, 2015
- Accounts receivable were $501 million at June 30, 2015; calculated days sales outstanding were 68 days compared to 71 days at March 31, 2015
- Inventories were $445 million at June 30, 2015; inventory turns were 5.5 times compared to 5.3 at March 31, 2015
- Restructuring charges and integration costs totaled $2 million
The cash conversion cycle improved by eight days from the previous quarter driven by improvements in receivables, payables and inventory. Benchmark expects further improvements throughout the year.
Second Quarter 2015 Industry Sector Update
The following table sets forth revenue by industry sector for the referenced quarters.
Revenues across all sectors improved quarter-over-quarter. Revenues from Industrial Controls benefitted from the positive impact of new program introductions, offsetting weaker demand for programs related to energy markets. Telecommunications and Computing customer revenues improved with strong sales in the final month of the quarter. Medical and Test & Instrumentation grew at a healthy pace with the successful qualification of new products.
Second Quarter 2015 Bookings Update
- New program bookings were $110-130 million
- 13 engineering awards supporting early engagement opportunities
- 29 manufacturing wins across all market sectors
Margin Improvement Initiatives
Benchmark continues to diversify its portfolio into higher margin business sectors and pursue lean and operational excellence initiatives. Improved operating margins reflect the benefits of these programs and the Company expects further benefits to accrue over time. Benchmark remains committed to achieving its long-term goal of a 4.5% operating margin.
- Second quarter 2015 common share repurchases totaled $19 million or 0.8 million shares
- Amount remaining on current share repurchase program is $69 million
- Over the past three years, more than 50% of free cash flows returned to shareholders through buybacks
In addition to ongoing share repurchases, Benchmark has spent $8 million in the second quarter and $25 million year-to-date on capital expenditures related to improving operations and expanding capabilities for customers. For the full year, capital expenditures are expected to range from $40-50 million.
Third Quarter 2015 Outlook
- Revenue between $635-$665 million
- Diluted earnings per share between $0.38-$0.42 (excluding restructuring charges)
About Benchmark Electronics, Inc.
Benchmark provides integrated manufacturing, design and engineering services to original equipment manufacturers of industrial control equipment (including equipment for the aerospace and defense industries), telecommunication equipment, computers and related products for business enterprises, medical devices, and test and instrumentation products. Benchmark's global operations include facilities in seven countries, and its common shares trade on the New York Stock Exchange under the symbol BHE.