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Benchmark Electronics Inc. has announced a revenue of $574 million and net income of $22 million for the third quarter ended September 30, 2016. EPS was $0.44 ($0.36 non‐GAAP) and operating cash flow was $70 million. The company has reported improved cash conversion cycle to 80 days and repurchased $12 million of common stock.
“In the September quarter, we made good progress on working capital management, reducing our cash conversion cycle by three days and generating $70M of operating cash flow. We modestly expanded operating margins on a sequential basis and delivered on our published guidance. However, the lack of sustained revenue growth continues to be a challenge and a critical focus area for the organization going forward,” said Paul Tufano, Benchmark’s President and CEO. “Since being named Benchmark’s CEO four weeks ago, I have traveled to a number of our sites and visited with a variety of customers. I am excited by the capabilities that we possess, the strength of our customer relationships and the commitment of our people. As we look forward, we are defining a clear strategy to accelerate long‐term revenue growth aligned to an optimized global footprint that leverages our core strengths in design, electronics manufacturing, and precision technologies to add significant value for our customers and shareholders.”
“We improved our cash conversion cycle to 80 days during the third quarter and remain on track to achieve 75 days exiting the year,” said Don Adam, CFO. “We generated $70 million in cash flow from operations during the quarter, bringing our year‐to‐date total to $228 million – which is nearly a 100% increase over the same 9‐month period last year. During the quarter, we purchased $12 million of our common shares, extending our share repurchases to 37 consecutive quarters. We have $94 million remaining in our current share repurchase program.”
Third Quarter 2016 Industry Sector Update
Third quarter revenues from Benchmark’s higher‐value markets were in‐line with expectations. Test & Instrumentation revenues were strong, primarily from semi‐capital equipment customers; Medical was stable; and Industrials were lower due to new program delays. In traditional markets, demand was strong, but Telecommunication revenues were below expectations because of customer qualification timing. The company expects Telecommunications demand to remain strong through the fourth quarter.
Third Quarter 2016 Bookings Update
The Company projects new program bookings for the third quarter will result in annualized revenue of $110 to $135 million when fully launched in the next 12‐18 months. The new program bookings align with Benchmark’s strategic focus on higher‐value markets. For the last 12 months, 75% of new bookings came from these targeted growth markets.
About Benchmark Electronics Inc.
Benchmark provides integrated manufacturing, design and engineering 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.