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): June 2, 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
Statement of Operations for the year ended December 31, 1999.
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<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: June 2, 2000
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<PAGE>
ITEM 7(b). PRO FORMA FINANCIAL INFORMATION.
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<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
The following unaudited pro forma condensed combined statement of
operations gives effect to the acquisition by Benchmark of all the outstanding
capital stock of AVEX Electronics, Inc. and its subsidiaries and certain
affiliates ("AVEX") as if it had occurred as of January 1, 1999.
The AVEX acquisition was accounted for under the purchase method of
accounting. The unaudited pro forma condensed combined statement of operations
is 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 statement 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 Annual Report on Form 10-K as Exhibit 99.1. The pro forma
statement of operations presented herein supersedes the pro forma statement of
operations filed as Exhibit 99.1 in the Form 10-K of Benchmark. No pro forma
balance sheet at March 31, 2000 has been provided as the AVEX acquisition is
included in Benchmark's historical balance sheet at March 31, 2000.
The unaudited pro forma condensed combined statement of operations 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
statement of operations does not purport to represent what Benchmark's results
of operations would actually have been if the AVEX acquisition had been
consummated on the indicated date, nor are they necessarily indicative of
Benchmark's results of operations for any future period.
On May 22, 2000, the independent accounting firm hired by J.M. Huber
Corporation and Benchmark to resolve the dispute between the companies, in
connection with the AVEX working capital adjustment, released its findings and
held that the final working capital adjustment was $2.0 million greater than the
current liability recorded by Benchmark at March 31, 2000 as an estimate of the
working capital adjustment. The unaudited pro forma condensed combined statement
of operations reflects the effect of the final working capital adjustment in the
adjustments to amortization of goodwill and interest expense on borrowings under
the Revolving Credit Facility used to pay the working capital adjustment.
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<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
--------------------- -------------------------
BENCHMARK AVEX(A) ADJUSTMENTS COMBINED
--------- -------- ----------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Sales................................ $877,839 $640,174 $ -- $1,518,013
Cost of sales........................ 810,309 632,194 -- 1,442,503
-------- -------- ------- ----------
Gross profit............... 67,530 7,980 75,510
Selling, general & administrative
expenses........................... 32,477 333,313 (5,456)b 58,516
(1,818)d
Amortization of goodwill............. 6,430 -- 6,042 12,472
-------- -------- ------- ----------
Income (loss) from
operations.............. 28,623 (25,333) 1,232 4,522
Interest and other income net........ 1,350 108 (300)e 1,158
Interest expense..................... (9,696) (13,941) 13,941 f (24,066)
(822)g
(13,488)h
-------- -------- ------- ----------
Income (loss) before taxes and
extraordinary item............ 20,277 (39,166) 503 (18,386)
Income tax expense (benefit)......... 7,005 960 176 i (6,435)
(14,576)g
-------- -------- ------- ----------
Income (loss) before
extraordinary item............ 13,272 (40,126) 14,903 (11,951)
Income (loss) before extraordinary
item per common share Basic........ $ 0.94 $ (0.78)
Income (loss) before extraordinary
item per common share Diluted...... $ 0.88 $ (0.78)
Weighted average common shares
outstanding:
Basic........................... 14,081 1,306 k 15,387
Diluted......................... 15,010 377 k 15,387
</TABLE>
See accompanying notes to unaudited pro forma condensed combined statement
of operations.
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<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED STATMENT OF OPERATIONS
Adjustments have been made to the unaudited pro forma condensed combined
statement 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.
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<PAGE>
(k) 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
earnings per common share.
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