CoorsTek First Quarter Revenue Grows 21
Percent to $145.7 Million
GOLDEN, Colo., April 25 CoorsTek, Inc. , a
leading designer and manufacturer of critical components and integrated
assemblies for the semiconductor capital equipment industry and other high
tech applications, reported first quarter 2001 revenue of $145.7 million, 20.6
percent greater than the prior year's first quarter. Net income increased 50
percent to $7.8 million, or 73 cents per diluted share, from $5.2 million, or
72 cents per diluted share, during this same period. Weighted average shares
outstanding increased to 10.7 million diluted shares at March 31, 2001 from
7.2 million diluted shares a year ago owing to the follow-on offering of new
common shares completed in the third quarter of 2000.
"CoorsTek's excellent first quarter performance tracked our expectations
and illustrates the strength of our strategic positioning in our key
markets -- semiconductor capital equipment and advanced materials," said John
K. Coors, CoorsTek Chairman, President, and Chief Executive Officer. "We
gained market share with existing and new semiconductor OEM customers, which
offset the overall softness in this industry, and our advanced materials
segment posted solid results. Additionally, integrated assembly continues to
be a strategic opportunity for us, especially with respect to new technology
and 300-millimeter tools."
CoorsTek's semiconductor segment revenue increased 45 percent to $77.5
million in the first quarter of 2001 from the prior year's first quarter while
the gross margin decreased to 22.4 percent from 25.5 percent. A continuing
strategic shift in product mix caused this dilution. During the first quarter
of 2001, integrated assembly revenue grew significantly to $25.0 million from
$9.7 million a year ago. Although assembly services have a lower gross margin
than component manufacturing, they have substantially less invested capital
requirements and allow the Company to manage the supply chain for assembling
these complex systems. CoorsTek's advanced materials segment revenue for the
first quarter of 2001 equaled $68.2 million, a 1.5 percent increase over the
prior year's first quarter, while the gross margin increased 3.1 percent to
23.5 percent following cost efficiency measures taken during 2000. On a
consolidated basis, CoorsTek's first quarter 2001 gross margin of 22.9 percent
remained consistent with the prior year period.
Research and development expense (R&D) of $3.0 million for the 2001 first
quarter is included in selling, general, and administrative expenses (SG&A).
During the first quarter of 2001, CoorsTek began capturing these costs, which
had previously been included in cost of goods sold (COGS) and SG&A. SG&A as a
percentage of sales increased to 13 percent from 12 percent in the first
quarter of 2001 compared with the first quarter of 2000. Operating income
increased 11.8 percent to $14.5 million in the first quarter of 2001 versus
the 2000 first quarter and interest expense fell $2.5 million to $2.3 million
as a result of the repayment of debt during the third quarter of 2000.
CoorsTek's total debt to capitalization equaled 34.7 percent at March 31,
2001 compared with 32 percent at year-end 2000. Capital expenditures of $14.3
million for the first quarter of 2001 primarily funded capacity and capability
expansion in targeted markets including telecommunications, optoelectronics,
and semiconductor as well as the purchase of enterprise resource planning
(ERP) software. Capital expenditures totaled $6.9 million in the first
quarter of 2000.
First Quarter Events
-- Effective supply chain management is integral to CoorsTek's assembly
service capabilities. To enhance these skills, the Company acquired
ERP software. Implementation will create a foundation for gathering
information to facilitate greater resource management efficiencies.
-- CoorsTek and a leading manufacturer of advanced lithography equipment
signed a licensing agreement for co-developed technology for
200-millimeter and 300-millimeter lithography systems. CoorsTek is
manufacturing the ceramic and metal components and subassemblies for
the new generation systems using this technology. This licensing and
manufacturing agreement broadens the Company's technological
capabilities and deepens its penetration with a key company in the
semiconductor equipment industry.
-- CoorsTek acquired HP Plastics, a Texas-based manufacturer of high
performance injection molded plastics used primarily in the
semiconductor equipment market. This purchase augments CoorsTek's
materials expertise and provides yet another manufacturing solution to
offer its customers.
-- In response to the current softness in many of the markets CoorsTek
serves, the Company has initiated cost reduction actions on a plant
specific basis. Such actions include mandatory time off, restricted
overtime, and a hiring freeze. Additionally, the Company reduced its
total workforce by 13 percent during the quarter. These proactive
measures were taken and the associated costs incurred during the first
quarter. The Company will continue to evaluate its cost structure
relative to market conditions.
Second Quarter Outlook
The following information provides guidance for the Company's projected
results for the first six months of 2001. CoorsTek expects:
-- Total revenue between $240 million and $260 million.
-- Advanced materials segment revenue of approximately $135 to $140
million.
-- Semiconductor segment revenue between $105 million and $120 million.
-- Gross profit margin of approximately 21 percent.
-- SG&A of approximately $35 million, which includes R&D of $5 million.
The Company will continue to invest in activities such as R&D and
capability enhancements to ensure its long-term strategic advantage.
Mr. Coors concluded, "As our guidance reflects, we expect the
semiconductor sector to weaken further during the second quarter while our
presence in the advanced materials markets will continue to act as a strategic
buffer. We have prepared for the semiconductor industry's cyclicality, both
in terms of reducing our cost structure and positioning CoorsTek as the
supplier of choice. We believe that because of these strategic initiatives we
will emerge from the downturn as one of the industry's strongest outsourcing
partners."
CoorsTek designs and manufactures components, integrated assemblies, and
automated systems for the semiconductor capital equipment market and other
high technology applications. Using technical ceramics, precision-machined
metals, and high performance plastics, the Company's engineered solutions
enable its customers' products to overcome technological barriers and improve
performance. For additional information on CoorsTek, visit the Company's
website: http://www.coorstek.com.
The CoorsTek conference call is scheduled for today at 4:30 EDT and can be
accessed by dialing 800-240-2134, or if in the New York area, 212-699-6810.
The Company intends to make available a telephone replay through the close of
business Friday, April 27, 2001 (303-590-3000 or 800-405-2236, passcode
321183) and an Internet replay through the close of business Wednesday, May 2,
2001 (access via the CoorsTek website on the Investor Relations main page).
Subsequent earnings release conference call dates will be posted on the
Company website within one week of the close of each quarter.
Certain statements in this press release constitute "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. These forward looking
statements involve known or unknown risks, uncertainties, and other factors
that may cause the actual results, performance, or achievements of CoorsTek to
be materially different from any future results, performance, or achievements
expressed or implied by the forward looking statements. Specifically,
CoorsTek's ability to grow or sustain current revenue and earnings in the
semiconductor and advanced materials segments or achieve revenue, margin, and
expense targets may be affected by costs of raw materials, labor, and power,
costs associated with capital expenditures or acquisitions, changes in
interest or currency exchange rates, environmental and other regulatory
compliance expenses, other unforeseen expenses, competitive activity, the
cyclicality of the semiconductor market, customers' outsourcing needs and
product orders, the level and timing of commercialization of 300-millimeter
machined designs, customer acceptance of 300-millimter equipment, the demand
for integrated assemblies, the demand for advanced materials in market sectors
such as fiber optic infrastructure, electronics, medical, and energy, economic
and business conditions affecting the markets served, and general economic
conditions. Additionally, CoorsTek's ability to successfully manufacture
critical components for lithography systems is dependent on other factors as
well including reliability of the new technology, customer acceptance of this
technology, the level and timing of customer orders, and competitive product
innovation. CoorsTek's ability to successfully complete the implementation of
ERP software is dependent on numerous factors including reliability of the
software and effectiveness of the implementation teams. More detailed
information regarding risks and uncertainties is available in CoorsTek's
Registration Statement on Form S-1 (No. 333-38824), as amended, and CoorsTek's
Annual Report on Form 10-K for the year ended December 31, 2000, both filed
with the Securities and Exchange Commission, which are available free of
charge at the Commission's website at http://www.sec.gov.
COORSTEK, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
Three Months Ended
March 31,
2001 2000
Sales $145,714 $120,819
Cost of goods sold 112,284 93,400
Gross profit 33,430 27,419
Gross margin 22.9% 22.7%
Selling, general and administrative 18,926 (1) 14,449
Operating income 14,504 12,970
10.0% 10.7%
Interest expense 2,256 4,713
Income before income taxes 12,248 8,257
Income tax expense 4,470 3,055
Net income $7,778 $5,202
Net income per basic share of
common stock $0.74 $0.73
Weighted average shares outstanding-
basic 10,561 7,143
Net income per diluted share of
common stock $0.73 $0.72
Weighted average shares outstanding-
diluted 10,703 7,220
(1) Selling, general and administrative includes $3.0 million of research
and development costs in 2001.
COORSTEK, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
March 31, December 31,
2001 2000
ASSETS
Current assets:
Cash $738 $--
Accounts receivable 64,736 75,915
Inventories 107,687 101,973
Other assets 21,317 17,178
Total current assets 194,478 195,066
Properties, net 160,023 151,250
Other noncurrent assets 47,368 46,579
Total assets $401,869 $392,895
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of debt $3,013 $900
Accounts payable 18,107 29,634
Other current liabilities 29,870 35,906
Total current
liabilities 50,990 66,440
Long-term debt 112,298 97,230
Other long-term liabilities 21,555 20,265
Total liabilities 184,843 183,935
Shareholders' equity 217,026 208,960
Total liabilities and shareholders'
equity $401,869 $392,895
COORSTEK, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
Three Months Ended
March 31,
2001 2000
Cash flows from operating activities:
Net income $7,778 $5,202
Adjustments to reconcile net
income to net
cash provided by operating
activities:
Depreciation and
amortization 6,143 6,004
Change in current assets
and current
liabilities and other:
Accounts receivable 11,179 (15,928)
Inventories (5,714) (5,120)
Accounts payable (11,527) 2,884
Other (9,248) (6,958)
Net cash used by operating activities (1,389) (13,916)
Cash flows from investing activities:
Additions to properties (14,253) (6,907)
Acquisitions, net of cash
acquired (1,416) (830)
Other (50) (54)
Net cash used by investing activities (15,719) (7,791)
Cash flows from financing activities:
Proceeds from issuance of debt 38,167 253,992
Payments on debt (20,986) (227,700)
Issuance of stock 665 60
Net cash provided by financing
activities 17,846 26,352
Cash and cash equivalents:
Net increase (decrease) in cash
and cash equivalents 738 4,645
Balance at beginning of period -- --
Balance at end of period $738 $4,645
COORSTEK, INC.
SEGMENT INFORMATION
(In thousands)
Three Months Ended
March 31,
2001 2000
Net sales:
Semiconductor segment $77,480 $53,576
Advanced Materials segment 68,234 67,243
$145,714 $120,819
Gross Profit:
Semiconductor segment $17,369 $13,680
Advanced Materials segment 16,061 13,739
$33,430 $27,419
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