Benchmark Electronics Inc. (BHE, Financial) filed Quarterly Report for the period ended 2010-09-30.
Benchmark Electronics Inc. has a market cap of $1.1 billion; its shares were traded at around $17.61 with a P/E ratio of 13.2 and P/S ratio of 0.5. BHE is in the portfolios of Chuck Royce of Royce& Associates, John Buckingham of Al Frank Asset Management, Inc., Paul Tudor Jones of The Tudor Group, Kenneth Fisher of Fisher Asset Management, LLC, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
Sales for the third quarter of 2010 were $613.9 million, a 20% increase from sales of $510.5 million for the same quarter in 2009. Sales for the nine months ended September 30, 2010 were $1.8 billion, a 19% increase from sales of $1.5 billion for the same period in 2009. This increase is a result of a combination of new program wins, an expansion of our service offerings and a continued improvement in the overall business environment when compared to the first nine months of 2009. The following table sets forth, for the periods indicated, the percentages of our sales by industry sector.
Gross profit increased 30% to $47.7 million for the three months ended September 30, 2010 from $36.8 million in the same period of 2009 and increased 36% to $140.0 million for the nine months ended September 30, 2010 from $103.0 million in the same period of 2009 due primarily to an increase in sales. Gross profit as a percentage of sales increased to 7.8% during the third quarter of 2010 from 7.2% in 2009 and increased to 7.9% during the first nine months of 2010 from 6.9% in 2009 primarily due to a better product mix, our operating efficiencies and a better utilization rate due to the higher level of sales. 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 unabsorbed 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 increased 9% to $23.4 million in the third quarter of 2010 from $21.4 million in the third quarter of 2009 and increased 10% to $68.9 million in the first nine months of 2010 from $62.9 million in the same period of 2009. Selling, general and administrative expenses, as a percentage of sales, were 3.8% and 4.2%, respectively, for the third quarter of 2010 and 2009, and 3.9% and 4.2%, respectively, for the first nine months of 2010 and 2009. The increase in selling, general and administrative expenses is primarily due to resources necessary to support our customers higher sales volumes in 2010. The decrease in selling, general and administrative expenses as a percentage of sales is primarily associated with the impact of higher sales volumes during 2010.
We recognized $2.1 million in restructuring charges during the first nine months of 2010 related to capacity reduction and reductions in workforce in certain facilities in the Americas and Asia. See Note 12 to the Condensed Consolidated Financial Statements in Item 1 of this report. In the fourth quarter of 2010, we expect to incur approximately $5.0 million in restructuring charges.
Interest income for the nine-month periods ended September 30, 2010 and 2009 was $1.2 million and $1.7 million, respectively. The decrease is primarily due to the overall decline in market rates of interest.
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Benchmark Electronics Inc. has a market cap of $1.1 billion; its shares were traded at around $17.61 with a P/E ratio of 13.2 and P/S ratio of 0.5. BHE is in the portfolios of Chuck Royce of Royce& Associates, John Buckingham of Al Frank Asset Management, Inc., Paul Tudor Jones of The Tudor Group, Kenneth Fisher of Fisher Asset Management, LLC, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
Sales for the three months ended September 30, 2010 increased 20% to $613.9 million compared to $510.5 million for the same period of 2009. This increase is a result of a combination of new program wins, an expansion of our service offerings and a continued improvement in the overall business environment when compared to the third quarter of 2009. The increase in sales when comparing the third quarter of 2010 to 2009 has been broad based with increases in all of the industry sectors we serve, except for the medical devices industry. During the three months ended September 30, 2010, sales to customers in the computers and related products for business enterprises industry, testing and instrumentation products industry, industrial control equipment industry, and telecommunication equipment industry increased 5%, 174%, 46% and 16%, respectively, from 2009. In the third quarter of 2010, these increases were partially offset by a 21% decrease in sales to customers in the medical devices industry.Sales for the third quarter of 2010 were $613.9 million, a 20% increase from sales of $510.5 million for the same quarter in 2009. Sales for the nine months ended September 30, 2010 were $1.8 billion, a 19% increase from sales of $1.5 billion for the same period in 2009. This increase is a result of a combination of new program wins, an expansion of our service offerings and a continued improvement in the overall business environment when compared to the first nine months of 2009. The following table sets forth, for the periods indicated, the percentages of our sales by industry sector.
Gross profit increased 30% to $47.7 million for the three months ended September 30, 2010 from $36.8 million in the same period of 2009 and increased 36% to $140.0 million for the nine months ended September 30, 2010 from $103.0 million in the same period of 2009 due primarily to an increase in sales. Gross profit as a percentage of sales increased to 7.8% during the third quarter of 2010 from 7.2% in 2009 and increased to 7.9% during the first nine months of 2010 from 6.9% in 2009 primarily due to a better product mix, our operating efficiencies and a better utilization rate due to the higher level of sales. 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 unabsorbed 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 increased 9% to $23.4 million in the third quarter of 2010 from $21.4 million in the third quarter of 2009 and increased 10% to $68.9 million in the first nine months of 2010 from $62.9 million in the same period of 2009. Selling, general and administrative expenses, as a percentage of sales, were 3.8% and 4.2%, respectively, for the third quarter of 2010 and 2009, and 3.9% and 4.2%, respectively, for the first nine months of 2010 and 2009. The increase in selling, general and administrative expenses is primarily due to resources necessary to support our customers higher sales volumes in 2010. The decrease in selling, general and administrative expenses as a percentage of sales is primarily associated with the impact of higher sales volumes during 2010.
We recognized $2.1 million in restructuring charges during the first nine months of 2010 related to capacity reduction and reductions in workforce in certain facilities in the Americas and Asia. See Note 12 to the Condensed Consolidated Financial Statements in Item 1 of this report. In the fourth quarter of 2010, we expect to incur approximately $5.0 million in restructuring charges.
Interest income for the nine-month periods ended September 30, 2010 and 2009 was $1.2 million and $1.7 million, respectively. The decrease is primarily due to the overall decline in market rates of interest.
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