Benchmark Electronics Reports Fourth Quarter And FY 2016 Results

ANGLETON, Texas, Feb. 8, 2017 /PRNewswire/ -- Benchmark Electronics, Inc. (NYSE: BHE) today announced financial results for the fourth quarter and year ended December 31, 2016.

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

"I am pleased by the Company's performance in the fourth quarter, which met or exceeded each of our commitments.  Revenue and margins were at the top end of our guidance, and non-GAAP EPS of $0.45 exceeded by two cents.  We generated operating cash flow of $273 million for the year and ended 2016 with cash conversion days of 74, one day lower than our target and a twenty-day improvement from the year ago period," said Paul Tufano, Benchmark's CEO and President.

"During 2017, we will be realigning and invigorating the organization with three priorities critical to our success", Tufano added.  "First, the optimization of our global network coupled with a relentless focus on execution excellence.  Within our global teams, we are driving greater ownership and accountability and a heightened sense of urgency.  Second, the investment in a market segment organization tasked with driving appropriate customer acquisition, revenue and margin growth.  Third, the expansion of our engineering capabilities to provide our customers with the design services and technology building blocks that will allow them to go to market faster and more economically."

Tufano concluded, "I remain excited by our opportunities going forward and the enthusiasm and support of our customers and employees.  Looking ahead, our objective is to meet our commitments to customers, shareholders and employees while we reposition Benchmark for long-term growth."

Fourth Quarter 2016 Financial Highlights

• Operating margin was 3.9% (non-GAAP 4.8%).
• Cash flows from operating activities were $44 million during the quarter and $273 million for the year.
• Cash conversion cycle improved 6 days from 80 at September 30, 2016 to 74 days at December 31, 2016.
• Cash was $681 million at December 31, of which $626 million was held outside the U.S.

Cash Conversion Cycle

"We exceeded our 75-day cash conversion cycle target and exited the year at 74 days," said Don Adam, CFO.  "For the fourth quarter, we generated $44 million of cash flow from operations, bringing our full year total to $273 million.  We are targeting a cash conversion cycle range of 68-73 days and annual operating cash flows in the range of $125 - $150 million in 2017.  For the full year, we purchased $42 million of our common shares and have $93 million remaining in our current share repurchase program."

Fourth Quarter 2016 Industry Sector Update

Revenue by industry sector (dollars in millions) was as follows.

Fourth quarter revenues from higher-value markets were in line with expectations.  Test & Instrumentation revenues from semi-capital equipment customers remained strong, and new Industrial programs ramped as expected.  Medical revenues were slightly lower than anticipated due to regulatory delays.  Traditional revenues in Computing and Telecommunications were up on stronger computing demand and the completion of Telecommunications qualifications.

Fourth Quarter 2016 Bookings Update

• New program bookings of $115 to $140 million.
• 12 engineering awards supporting early engagement opportunities.
• 19 manufacturing wins across all market sectors.

The Company projects that new program bookings for the fourth quarter will result in annualized revenue of $115 to $140 million when fully launched in the next 12-18 months.  The new program bookings align with Benchmark's strategic focus on higher-value markets.

First Quarter 2017 Outlook

• Revenue between $530-$550 million.
• Diluted GAAP earnings per share between $0.19-$0.23.
• Diluted non-GAAP earnings per share between $0.24-$0.28 (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.

Fourth Quarter 2016 Results Conference Call Details
A conference call hosted by Benchmark management will be held today at 4:30 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 machine services to original equipment manufacturers of industrial 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.

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 expanding or realigning contractual terms, optimizing execution, realigning its footprint, maximizing operational performance, its cash conversion cycle, operating cash flows, the future value of bookings and first 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 our 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, 2015, in its other filings with the Securities and Exchange Commission and in its press releases.

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SOURCE Benchmark Electronics, Inc.