Ceradyne Inc. Announces Preliminary Results for Third Quarter 2002

    COSTA MESA, Calif.--Oct. 7, 2002--Ceradyne, Inc. today announced preliminary results for third quarter ended September 30, 2002, including 40% revenue growth compared to third quarter 2001, higher pre-tax income, and record-level bookings for the quarter.
    Revenue for third quarter 2002 is estimated at $14.3 million, a 40% increase over third quarter 2001. Pre-tax income is estimated at approximately $1 million, which is 17% higher than third quarter last year. Per-share net is expected within a range of seven cents to nine cents, with a tax rate of 35%, versus eight cents, with a 25% tax rate, reported for third quarter 2001.
    Bookings for the quarter reached a record-level of approximately $16 million, a 38% increase over prior-year third quarter bookings. Order backlog continued strong at $28.2 million compared to $25.6 million last year.
    Commenting on the outlook for fourth quarter and full-year 2002, Joel Moskowitz, Ceradyne chief executive officer, said: "We expect top-line growth to continue, especially since new programs are beginning to produce additional sales. For example, during the quarter, we received approximately $2.4 million in new orders for missile radomes and see the potential for as much as $3 million to $5 million in incremental annual revenues in 2003 from this new source. The Company has shipped 17 government-approved lots of its new Design II SAPI in the third quarter. Based on expected growth in SAPI business, as well as Ceradyne's overall product line, and offsetting previously projected downturn in diesel engine components, we project fourth-quarter revenues at $14 million to $16 million, compared to $12.1 million for fourth-quarter last year, and total revenues for 2002 at approximately $57 million to $60 million, compared to $45.3 million in 2001.
    "We are looking forward to continuing Ceradyne's growth and achieving new levels of revenues and profitability in 2003. In addition, Jerry Pellizzon, the Company's new chief financial officer, is initiating plans to improve the Company's financial efficiencies, which we anticipate will realize positive results in the near future," Moskowitz stated.
    Moskowitz continued, "The Company's focus will be to improve operating margins. As part of this strategy, Ceradyne has contracted with JCIT International to implement a business strategy, Demand Flow(R) Technology (DFT), an inventory/workflow control system. The objective of using DFT will be to lower production costs and increase productivity through reduced inventory levels, reduced `queue' times between operations, and other production improvement systems. We have committed to utilize DFT on our three core product lines -- armor, diesel engine components, and Clarity(TM) orthodontic brackets."
    Ceradyne develops, manufactures, and markets advanced technical ceramics for industrial, electronic, defense and consumer applications. Additional information can be found at the Company's website: www.ceradyne.com.

    This press release contains forward-looking statements regarding future events and the future performance of Ceradyne that involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are described 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.