Ceradyne, Inc. Reports First Quarter 2002 Results
COSTA MESA, Calif.--April 29, 2002--Ceradyne, Inc. today reported results for the first quarter ended March 31, 2002.Sales for the quarter rose 23% to a record $14.7 million from $11.9 million in the first quarter of 2001. Net income was $579,000, or 7 cents per basic and diluted share, compared to $1.19 million, or 14 cents per basic and diluted share, in the first quarter of 2001. The tax provision, combining federal and state tax rates, was 35% for the quarter, compared to 30% a year ago.
New bookings for the quarter grew strongly, rising 21% to $14.2 million from $11.7 million in 2001. The Company's order backlog at quarter end was $27.5 million, compared to the prior year backlog of $26.4 million.
Joel P. Moskowitz, Ceradyne president and CEO, commented: "Although shipments, new orders and backlog increased substantially from the year-ago period, gross margins declined. Margin pressure was caused by various costs associated with the threefold increase in diesel engine component shipments and a doubling of armor shipments. Additionally, the move to the recently leased 40,000 square-foot manufacturing facility in Irvine was delayed to the second quarter. The Company expects gradual margin improvement, as rising efficiencies along the `learning curve' help to increase internal yields and, thereby, reduce production costs."
Moskowitz added: "Ceradyne continues to work with the Government to resolve the small arms protective inserts (SAPI) quality issues and testing methodology discussed in the Company's April 3, 2002 press release and teleconference. Although the Government, thus far, has taken no formal action, such as a stop work order, and continues to make payment on prior shipped lots of SAPI, Ceradyne has voluntarily stopped producing its current SAPI design. The Company's strategy is first, to work with the Government in order to understand the quality and testing issues and second, resolve the status and disposition of the SAPI plates in question.
"We believe this issue relating to SAPI shipped prior to March 22, 2002 will not affect Ceradyne's future potential in SAPI or other ceramic armor products," stated Moskowitz.
Ceradyne develops, manufactures and markets advanced technical ceramics for industrial, electronic, defense and consumer applications. Additional information about the Company can be found at www.ceradyne.com.
Ceradyne will host a conference call today at 10:00 a.m. PDT (1:00 p.m. EDT) to discuss its 2002 first quarter results. Investors or other interested parties may listen to the teleconference live via the Internet at www.ceradyne.com or at www.CompanyBoardroom.com. These websites will also host an archive of the teleconference for 30 days. A telephonic playback will also be available from 1:00 p.m. PDT on April 29 through 5:00 p.m. PDT on May 1. The playback can be accessed by calling 800/642-1687 (or 706/645-9291 for international callers) and providing Conference ID 3963879.
Except for the historical information contained herein, certain matters discussed in this news release and teleconference constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. The Company may use words such as "anticipates," "believes," "plans," "expects," "intends," "future," and similar expressions to identify forward-looking statements. Factors which could affect the Company's actual results include the Company's ability to successfully resolve SAPI quality and testing issues without material liability and resume shipments of SAPI plates to the Government in a timely manner. Further information on these and other potential factors that could affect the Company's financial results are included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001, as filed with the Securities and Exchange Commission.
Below is a summary of unaudited comparative results. Amounts in thousands except for per share data.
Three Months Ended
March 31,
2002 2001
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NET SALES $14,678 $11,949
Cost of product sales 11,789 8,123
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GROSS PROFIT 2,889 3,826
Operating Expenses:
Selling 448 517
General and administrative 1,138 1,263
Research and development 482 481
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2,068 2,261
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INCOME FROM OPERATIONS 821 1,565
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Other income (expense):
Other income 82 141
Interest (expense) (12) (7)
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70 134
INCOME BEFORE PROVISION
FOR INCOME TAXES 891 1,699
Provision for income taxes 312 510
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NET INCOME $579 $1,189
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Earnings per share, basic $0.07 $0.14
Earnings per share, diluted $0.07 $0.14
Avg. shares outstanding, diluted 8,797 8,617
Condensed Consolidated Balance Sheet (in thousands):
March 31, 2002 Dec. 31, 2001
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(unaudited)
Cash and Cash Equivalents $145 $1,017
Other Current Assets 32,585 29,407
Net Property, Plant and Equipment 17,505 16,016
Other Assets 1,511 1,511
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Total Assets $51,746 $47,951
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Current Liabilities $10,308 $7,257
Long Term Debt 133 158
Deferred Revenue 202 270
Deferred Tax Liability 609 609
Stockholders' Equity $40,494 $39,657
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Total Liabilities and
Stockholders' Equity $51,746 $47,951
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