Actionable news
0
All posts from Actionable news
Actionable news in BHE: BENCHMARK ELECTRONICS,

Benchmark Electronics Reports Third Quarter Results




Three Months Ended





Sep 30,



Jun 30,



Sep 30,




2015



2015



2014


Net sales (in millions)


$630



$664



$731


Net income (in millions)


$21



$21



$17


Net income – non-GAAP (in millions)


$21



$22



$23


Diluted EPS


$0.40



$0.40



$0.31


Diluted EPS – non-GAAP


$0.41



$0.42



$0.43


Operating margin (%)


4.1%



3.9%



3.0%


Operating margin – non-GAAP (%)


4.3%



4.2%



4.0%


"In the third quarter, we were pleased to deliver a 30 basis point year-over-year and a 10 basis point quarter-over-quarter improvement in our non-GAAP operating margin as a result of continued focus on portfolio mix, lean and operational excellence initiatives, and working capital management," said Gayla Delly, Benchmark's President and Chief Executive Officer. "Benchmark's solid profitability results, evidenced by our 4.3% non-GAAP operating margin, were achieved despite lower-than-expected revenues. Notwithstanding our excellent operational achievements, headwinds in the industries we serve challenged our top line. Greater-than-expected demand from Computing customers partially offset end-market demand weakness in the Industrial, Test & Instrumentation and Telecom sectors. Medical revenues were pushed into the fourth quarter due to the timing of program qualifications."

"We expect our third quarter new program bookings to result in annualized revenue of $110 - $130 million when fully launched within the next 12-18 months. Bookings aligned again this quarter with our focus on early engineering engagement and long-term manufacturing solutions for customers in both higher growth and traditional markets."

Ms. Delly concluded, "Benchmark remains committed to creating shareholder value through a balanced approach to capital allocation, which consists of supporting our business, investing in strategic growth initiatives and continuing share repurchases. We returned $18 million to shareholders through share repurchases during the third quarter, and $71 million over the last 12 months. We also have a strong balance sheet and were excited to announce this morning our planned acquisition of Secure Technology. We remain confident that we are taking the right steps to drive growth and enhance value for our shareholders and our customers."

Third Quarter 2015 Financial Highlights

  • Accounts receivable were $467 million at September 30, 2015, and calculated days sales outstanding were 67 days compared to 68 days at June 30, 2015
  • Inventories were $422 million at September 30, 2015; inventory turns were 5.5 times for both the second and third quarters

The cash conversion cycle improved by one day from the previous quarter — which was four days less than forecasted due to lower than expected revenues. Benchmark continues to execute on improvement initiatives in receivables, payables and inventory, and the Company expects to make further progress in the coming quarters.

Third Quarter 2015 Industry Sector Update
The following table sets forth revenue by industry sector for the referenced quarters.



Sep 30,


Jun 30,


Sep 30,




2015


2015


2014


Industrial Controls

31

%

30

%

30

%

Telecommunications

24


27


32


Computing

22


20


21


Medical

14


14


10


Test & Instrumentation

9


9


7




100

%

100

%

100

%









Our performance varied by sector in the third quarter, resulting in lower-than-expected revenues across the Company's primary end-markets. Telecommunications revenue declines were greater than expected, while customer revenues in Computing were better than expected. Strength in Computing and new program introductions in Industrial Controls and Test & Instrumentation did not offset the headwinds associated with slower capital spending in the Company's end-markets. Additionally, slower-than-expected new product qualifications impacted revenues in Medical.

Third Quarter 2015 Bookings Update

  • 16 engineering awards supporting early engagement opportunities
  • 21 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. The programs drove higher operating...


More