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Benchmark Electronics Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 8, 2012 06:22PM
Benchmark Electronics Inc. (BHE) filed Quarterly Report for the period ended 2012-06-30. Benchmark Electronics, Inc. has a market cap of $894.8 million; its shares were traded at around $16 with a P/E ratio of 14.4 and P/S ratio of 0.4.
Highlight of Business Operations:Sales for the three months ended June 30, 2012 increased 8% to $630.0 million compared to $585.5 million for the same period of 2011. During the three months ended June 30, 2012, sales to customers in the computers and related products for business enterprises industry, telecommunication equipment industry, and medical devices industry increased 19%, 18% and 8%, respectively, from 2011. In the second quarter of 2012, these increases were partially offset by a 19% decrease in sales to customers in the testing and instrumentation products industry and a 2% decrease in sales to customers in the industrial control equipment industry.
Sales for the second quarter of 2012 were $630.0 million, an 8% increase from sales of $585.5 million for the same quarter in 2011. Sales for the six months ended June 30, 2012 were $1.2 billion, a 9% increase from sales of $1.1 billion for the same period in 2011. The following table sets forth, for the periods indicated, the percentages of our sales by industry sector.
Gross profit increased 22% to $46.0 million for the three months ended June 30, 2012 from $37.8 million in the same period of 2011 and increased 15% to $86.5 million for the six months ended June 30, 2012 from $75.4 million in the same period of 2011 due primarily to an increase in sales. Gross profit as a percentage of sales increased to 7.3% during the second quarter of 2012 from 6.4% in the second quarter of 2011 and increased to 7.1% during the first six months of 2012 from 6.7% in 2011 primarily due to an increase in sales, partially driven by new programs, and our continued focus on cost controls. We experience fluctuations in gross profit from period to period. Different programs contribute different gross profits depending on factors such as the types of services involved, location of production, size of the program, complexity of the product and level of material costs associated with the various products. Moreover, new programs can contribute relatively less to our gross profit in their early stages when manufacturing volumes are usually lower, resulting in inefficiencies and under-absorbed manufacturing overhead costs. In addition, a number of our new and higher volume programs remain subject to competitive constraints that could exert downward pressure on our margins. During periods of low production volume, we generally have idle capacity and reduced gross profit.
Selling, general and administrative expenses decreased by 1% to $22.8 million in the second quarter of 2012 from $23.1 million in the second quarter of 2011. Selling, general and administrative expenses increased 1% to $45.3 million in the first six months of 2012 from $44.9 million in the same period of 2011 primarily due to higher variable compensation expenses. Selling, general and administrative expenses, as a percentage of sales, were 3.6% and 3.9%, respectively, for the second quarters of 2012 and 2011, and 3.7% and 4.0%, respectively, for the first six months of 2012 and 2011. The decrease in selling, general and administrative expenses as a percentage of sales is primarily associated with the impact of higher sales volumes in 2012.
We reported net income of $19.2 million, or diluted earnings per share of $0.33 for the first six months of 2012, compared with net income of $29.2 million, or diluted earnings per share of $0.48 for the same period of 2011. The net decrease of $10.0 million from 2011 was primarily due to the factors discussed above.
Stocks Discussed: BHE,