News
Net income dropped to $600,000, versus $3.3 million a year ago, on cost overruns and new program launches.
The results met company expectations.
In a press statement, Jeffrey T. Gill, president and chief executive, said, "Revenue continued to climb while the costs associated with the increase in manufacturing capacity, launch of new programs and disruption of material deliveries began to abate from the levels experienced during the fourth quarter. We expect these cost overruns to continue during the second quarter at a declining rate as the new manufacturing cells are completed and new programs enter full production, after which we expect margins to gradually return to historical levels."
For the quarter, backlogs rose 22% to a record $261.7 million. it was the ninth consecutive quarter of
year-on-year growth in bookings.
Sales of electronics declined to $35.6 million, compared to $40.9 million for the prior year and were down 23% sequentially from the fourth quarter. The compay said the drop was normal and cited seasonality in government's procurement cycles. Gross profit for the quarter was $5 million, down from $7.9 million, due to continued decline in shipments for data systems products.
First-quarter net income was $16.9 million, up 11% from $15.2 million a year ago.
Cary T. Fu, president and chief executive, called the results "excellent in
light of the soft economic conditions seen recently in the technology
marketplace."
For the quarter, operating margin was 4.4%, and return on invested capital was 13.8%.
As of March 31 Benchmark had cash and short-term investments of $344 million and no outstanding debt.
Inventories increased by $39 million to $295 million; inventory turns were 6.4 times.
Benchmark guided for second quarter revenue of $525 million to $550 million.
"There are a host of cutting-edge safety systems in varying stages of development that will alter the consumer's perception of what makes for a safe vehicle," says ABI Research senior automotive analyst Robert LaGuerra. "What is interesting is that automakers disagree about how they define a safe vehicle."
LaGuerra adds that automakers are tackling the issue of safety from varying perspectives. From electronic stability control, adaptive cruise control and telematics systems, to blind-spot detection, lane-departure warning, driver monitoring, and pedestrian-based safety systems, all will be used in some combination to make for a safer vehicle.
Automakers such as Honda and Mercedes are among the first to introduce systems promoting pedestrian safety, while GM may be the first to introduce both ESC and reactionary safety systems such as OnStar as standard equipment across all its North American models.
ABI cautions that there are still issues to be overcome, including high systems costs, the ability to have on-board safety systems communicate with each other, decisions about how much control should be taken away from the driver in an emergency, plus software and processor limitations in assessing an emergency situation on a real-time basis. ABI suggests that further systems integration will not only enhance the level of safety, but help reduce overall system costs.
