UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 13, 2000
BENCHMARK ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 1-10560 74-2211011
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
3000 TECHNOLOGY DRIVE, ANGLETON, TEXAS 77515
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (979) 849-6550
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro forma financial information.
Benchmark Electronics, Inc. Unaudited Pro Forma Condensed Combined
Statements of Operations for the year ended December 31, 1999 and the three
months ended March 31, 2000.
Benchmark Electronics, Inc. Unaudited Pro Forma Condensed Combined Balance
Sheet as of March 31, 2000.
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BENCHMARK ELECTRONICS, INC.
By: /s/ GAYLA J. DELLY
GAYLA J. DELLY
TREASURER
Dated: July 13, 2000
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<PAGE>
ITEM 7(b). PRO FORMA FINANCIAL INFORMATION.
3
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined statement of
operations for the year ended December 31, 1999 gives effect to the acquisition
by Benchmark of all the outstanding capital stock of AVEX Electronics, Inc. and
its subsidiaries and certain affiliates ("AVEX") and the disposition of its
Swedish operations as if they had occurred as of January 1, 1999. The following
unaudited pro forma condensed combined statement of operations for the three
months ended March 31, 2000 gives effect to the disposition of its Swedish
operations as if it had occurred as of January 1, 1999. The following unaudited
pro forma condensed combined balance sheet as of March 31, 2000 gives effect to
the disposition of the Swedish operations as if it had occurred on that date.
The results of operations of the acquired AVEX business are included in
Benchmark's historical results for the three months ended March 31, 2000 and the
financial position of the acquired AVEX business is reflected in Benchmark's
historical balance sheet as of March 31, 2000.
The AVEX acquisition was accounted for under the purchase method of
accounting. The unaudited pro forma condensed combined statements of operations
are based on the historical financial statements of Benchmark and AVEX and the
estimates and assumptions in the notes to the unaudited pro forma condensed
combined statements of operations. The unaudited pro forma condensed combined
statement of operations for the year ended December 31, 1999 had been previously
filed with Benchmark's Current Report on Form 8-K dated June 2, 2000. The pro
forma statement of operations for the year ended December 31, 1999 presented
herein supersedes the pro forma statement of operations filed in the Form 8-K of
Benchmark dated June 2, 2000.
On July 12, 2000, Benchmark entered into a definitive agreement to sell its
Swedish operations, constituting inventories and fixed assets, at the net book
value of these assets.
The unaudited pro forma condensed combined financial statements should be
read in conjunction with the historical financial statements of Benchmark and
AVEX and "Management's Discussion and Analysis of Financial Conditions and
Results of Operations" of Benchmark. The unaudited pro forma condensed combined
financial statements do not purport to represent what Benchmark's results of
operations or financial position would actually have been if the AVEX
acquisition and the disposition of the Swedish operations had been consummated
on the indicated dates, nor are they necessarily indicative of Benchmark's
results of operations or financial position for any future period.
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<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SUBTOTAL PRO FORMA HISTORICAL
HISTORICAL BEFORE DISPOSITION ------------- PRO FORMA
------------------- ---------------------------- SWEDISH -----------------------
BENCHMARK AVEX(A) ADJUSTMENTS COMBINED OPERATIONS k ADJUSTMENTS COMBINED
--------- -------- ----------- ---------- ------------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Sales................................ $877,839 $640,174 $ -- $1,518,013 $ 26,657 $ -- $ 1,491,356
Cost of sales........................ 810,309 632,194 -- 1,442,503 21,448 -- 1,421,055
--------- -------- ----------- ---------- ------------- ----------- -----------
Gross profit............... 67,530 7,980 75,510 5,209 70,301
Selling, general & administrative
expenses........................... 32,477 333,313 (5,456)b 58,516 833 -- 57,683
(1,818)d
Amortization of goodwill............. 6,430 -- 6,042 c 12,472 -- -- 12,472
--------- -------- ----------- ---------- ------------- ----------- -----------
Income (loss) from
operations.............. 28,623 (25,333) 1,232 4,522 4,376 -- 146
Interest and other income net........ 1,350 108 (300)e 1,158 20 -- 1,138
Interest expense..................... (9,696) (13,941) 13,941 f (24,066) -- 1,071 l (22,995)
(822)g
(13,488)h
-------- -------- ------- ---------- ------------- ----------- -----------
Income (loss) before taxes and
extraordinary item............ 20,277 (39,166) 503 (18,386) 4,396 1,071 (21,711)
Income tax expense (benefit)......... 7,005 960 176 i (6,435) 1,231 369 i (7,297)
(14,576)j
-------- -------- ------- ---------- ------------- ----------- -----------
Income (loss) before
extraordinary item............ 13,272 (40,126) 14,903 (11,951) 3,165 702 (14,414)
Income (loss) before extraordinary
item per common share Basic........ $ 0.94 $ (0.78) $ (0.94)
Income (loss) before extraordinary
item per common share Diluted...... $ 0.88 $ (0.78) $ (0.94)
Weighted average common shares
outstanding:
Basic........................... 14,081 15,387 m 15,387 m
Diluted......................... 15,010 15,387 m 15,387 m
</TABLE>
See accompanying notes to unaudited pro forma condensed combined statements
of operations.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
---------------------------------- ---------------------------
SWEDISH
BENCHMARK OPERATIONS (k) ADJUSTMENTS TOTAL
--------- --------------------- ----------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Sales................................ $349,155 $ 23,129 $ -- $ 326,026
Cost of sales........................ 325,509 19,653 -- 305,856
--------- --------------------- ----------- ----------
Gross profit............... 23,646 3,476 20,170
Selling, general & administrative
expenses........................... 12,681 544 -- 12,137
Amortization of goodwill............. 3,220 -- -- 3,220
--------- --------------------- ----------- ----------
Income from operations..... 7,745 2,932 -- 4,813
Interest and other income net........ 828 66 -- 762
Interest expense..................... (5,563) -- 268 l (5,295)
--------- --------------------- ----------- ----------
Income before taxes ............ 3,010 2,998 268 280
Income tax expense .................. 1,033 1,034 92 i 91
--------- --------------------- ----------- ----------
Net income ..................... $ 1,977 $ 1,964 $ 176 $ 189
========= ===================== =========== ==========
Income per common share Basic........ $ 0.12 $ 0.01
Income per common share Diluted...... $ 0.12 $ 0.01
Weighted average common shares
outstanding:
Basic........................... 16,248 16,248
Diluted......................... 17,173 17,173
</TABLE>
See accompanying notes to unaudited pro forma condensed combined statements
of operations.
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<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED STATMENTS OF OPERATIONS
Adjustments have been made to the unaudited pro forma condensed combined
statements of operations to reflect the following:
(a) Includes the historical results of operations of AVEX for the period to
August 24, 1999, the consummation date of the acquisition.
(b) To eliminate the historical costs related to (i) certain redundant
executive headquarter costs; (ii) the termination of intercompany services
previously provided by the Seller to AVEX under an intercompany arrangement
that included fees based on the estimated utilization of Seller's
resources; (iii) AVEX's domestic defined benefit pension plan, which plan
and the obligations thereunder are not being continued by Benchmark; offset
by (iv) the costs that Benchmark will incur to replace the Seller's
intercompany services arrangement. A summary of such adjustments follows
(in thousands):
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED
--------------------
DECEMBER 31,
1999
------------
<S> <C>
Redundant executive headquarter
costs.............................. $(2,948)
Historical intercompany service
fee................................ (2,384)
Historical cost of pension plan not
continued.......................... (791)
Benchmark replacement of intercompany
services arrangement............... 667
-------
Total...................... $(5,456)
</TABLE>
(c) To record amortization of goodwill over an estimated useful life of 15
years.
(d) To eliminate adjustments to the 1998 write down of certain assets related to
AVEX's San Jose, California facility, which were not acquired by Benchmark,
included in AVEX's historical financial statements.
(e) To reduce interest income related to cash balances utilized in funding a
portion of the AVEX acquisition.
(f) To eliminate intercompany interest expense with the Seller and interest on
AVEX notes payable not assumed under the Stock Purchase Agreement.
(g) To record amortization of debt issuance costs over the life of the
applicable debt instruments.
(h) To record interest expense at 7.75%, 7.75%, and 6.0% on the amounts
outstanding under the Revolving Credit Facility, Term Loan, and the Notes,
respectively based on interest rates in effect upon consummation of the
acquisition. A change in the interest rate of 1/8 of a percent would result
in a change in annual interest expense related to the amounts outstanding
under the Revolving Credit Facility and Term Loan of approximately $227,000.
(i) To record income tax adjustments related to the above pro forma adjustments.
(j) To adjust AVEX historical income tax expense as if AVEX was included in the
consolidated federal income tax return of Benchmark. In the historical
combined financial statements of AVEX, federal income taxes were provided as
if AVEX filed a separate income tax return.
(k) To eliminate the historical operating results of the Swedish operations.
(l) To adjust interest expense at 7.75% as a result of the utilization of the
proceeds from the disposition of the Swedish operations to pay down the
Revolving Credit Facility.
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<PAGE>
(m) The following information reconciles the number of shares used to compute
historical and pro forma earnings (loss) per common share (in thousands):
<TABLE>
<CAPTION>
FOR THE YEAR
ENDED
-----------------
DECEMBER 31,
1999
-----------------
BASIC DILUTED
------ -------
<S> <C> <C>
Benchmark historical................. 14,081 15,010
Common shares issued in AVEX
acquisition on a pro forma basis as
of January 1, 1999................. 644 644
Common shares issued in public
offering in June 1999 on pro forma
basis as of January 1, 1999........ 662 662
Elimination of Benchmark stock
options antidilutive on a pro
forma basis in 1999................ -- (929)
------ ------
15,387 15,387
====== ======
</TABLE>
The effect of the if-converted method for the Notes is antidilutive and 2.5
million of potential common shares have not been considered in computing diluted
loss per common share.
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<PAGE>
BENCHMARK ELECTRONICS, INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
--------------- ----------------------------------
BENCHMARK ADJUSTMENTS TOTAL
--------------- --------------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................................. $ 1,073 $ -- $ 1,073
Accounts receivable, net .............................................. 224,376 -- 224,376
Income taxes receivable ............................................... 3,985 -- 3,985
Inventories ........................................................... 249,720 (12,549)a 237,171
Prepaid expenses and other debts ...................................... 15,636 -- 15,636
Deferred tax asset .................................................... 2,347 -- 2,347
--------------- --------------- ---------------
Total current assets ................................................ 497,137 (12,549) 484,588
Net property, plant and equipment ....................................... 121,822 (1,274)a 120,548
Goodwill, net ........................................................... 169,225 -- 169,225
Other assets ............................................................ 23,648 -- 23,648
--------------- --------------- ---------------
$ 811,832 $ (13,823) $ 798,009
=============== =============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt ..................................... $ 19,011 $ -- $ 19,011
Accounts payable ...................................................... 216,117 -- 216,117
Accrued liabilities ................................................... 28,726 -- 28,726
--------------- --------------- ---------------
Total current liabilities ........................................... 263,854 -- 263,854
Revolving line of credit ................................................ 95,100 (13,823)b 81,277
Long-term debt, less current portion .................................... 76,611 -- 76,611
Convertible subordinated notes .......................................... 80,200 -- 80,200
Deferred tax liability .................................................. 5,747 -- 5,747
Other long term liability ............................................... 5,789 -- 5,789
--------------- --------------- ---------------
Total liabilities ................................................... 527,301 (13,823) 513,478
Shareholders' equity:
Common shares ......................................................... 1,628 -- 1,628
Additional paid-in capital ............................................ 201,732 -- 201,732
Retained earnings ..................................................... 80,751 -- 80,751
Accumulated other comprehensive loss .................................. 540 -- 540
Less treasury shares, at cost ......................................... (120) -- (120)
--------------- --------------- ---------------
Total shareholders' equity .......................................... 284,531 -- 284,531
--------------- --------------- ---------------
$ 811,832 $ (13,823) $ 798,009
=============== =============== ===============
</TABLE>
See accompanying notes to unaudited pro forma condensed combined balance sheet.
8
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED BALANCE SHEET
Adjustments have been made to the unaudited condensed combined balance sheet to
reflect the following:
(a) To reflect the disposition of the Swedish operations.
(b) To reflect the utilization of the proceeds from the disposition of the
Swedish operations to pay down the Revolving Credit Facility.
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