Applied Films Reports Record Revenues and Earnings For Second Quarter Fiscal Year 2004
LONGMONT, Colo., Jan. 21, 2004 -- Applied Films Corporation announced today results for the second quarter of fiscal 2004, ended December 27, 2003.
Second Quarter Fiscal 2004 Results from Continuing Operations
Net revenues for the second quarter of fiscal 2004 were $57.1 million compared to $29.1 million for the second quarter of fiscal 2003, an increase of 96.2%.
Income from continuing operations on a GAAP basis for the second quarter of fiscal 2004 was $3.5 million or $0.24 per fully diluted common share, compared to a loss from continuing operations on a GAAP basis of $581,000 or $0.05 per fully diluted common share for the second quarter of fiscal 2003. Our GAAP EPS corresponds to First Call's definition of GPS.
Pro forma income from continuing operations for the second quarter of fiscal 2004 was $4.1 million, or $0.28 per fully diluted common share, compared to $48,000 or $0.00 per fully diluted common share for the second quarter of fiscal 2003. Our pro forma EPS corresponds to First Call's definition of EPS.
The Company reports a pro forma non-GAAP financial measure so that management and investors can assess the ongoing performance of the company without considering the non-cash charges for the amortization of intangibles related to the LAC Acquisition. The pre-tax charge for amortization of other intangible assets in the fiscal second quarter was $1.1 million. A reconciliation of pro-forma non-GAAP measurements to GAAP can be found in the attached financial table.
Bookings for the quarter were $51.2 million. Equipment backlog as of December 27, 2003 was $88.7 million, compared to $75.9 million at the end of the second fiscal quarter of 2003, an increase of 16.9%, and compared to $94.6 million at the end of the first fiscal quarter of 2004. The Company expects to recognize revenue from this backlog over the next 6 to 12 months.
"We are pleased with our second quarter financial performance which exceeded our guidance for the quarter," stated Thomas T. Edman, President and Chief Executive Officer. "We were also pleased to record display bookings in the second quarter. We continue to see strong demand in this critical market for our deposition equipment, confirming our forecasts for strengthening display bookings. During the quarter, we were also pleased to announce our first 6th generation display orders. We are excited to be involved in new generation display investments as our customers target projected demand in the flat television market."
Business Outlook
The following statements are based on our current expectations for the third quarter of fiscal 2004. These statements are forward-looking and subject to the qualifying safe harbor statement.
Fiscal 2004 -- Third Quarter Guidance
* Net Revenues: We expect net revenues for the third quarter of fiscal
2004 to be between $57-59 million.
* GAAP Earnings Per Share: We expect GAAP earnings per share in the
range of approximately $0.24 - $0.26 per fully diluted share for the
third quarter of fiscal 2004.
* We expect fully diluted shares outstanding to be approximately
15 million for the third quarter of fiscal 2004.
* Amortization of Intangibles: We expect the amortization of
intangibles to be approximately $1.1 million for the third quarter of
fiscal 2004.
Second Quarter Fiscal 2004 Conference Call
Applied Films Corporation will conduct a conference call and webcast at 3:30 p.m. MST (5:30 p.m. EST) on Wednesday, January 21, 2004 to review second quarter fiscal year 2004 financial results. During the conference call and webcast, Thomas Edman, President and Chief Executive Officer, and Lawrence Firestone, Chief Financial Officer, will present the financial results for the quarter.
The public is invited to participate in the conference call by dialing 1-800-795-1259 or 1-785-832-0326 (International) at least 5-10 minutes prior to the start time (Conference ID: AFILMS) or via webcast at www.appliedfilms.com , and click on the "Investor Relations" button and then "Meetings and Presentations". A replay of the recorded conference call will be available until January 28, 2004. To listen to the replay, dial 1-800-839-4017.
Upcoming Events
Applied Films Corporation will be presenting at the D.A. Davidson Technology Conference February 5-6, 2004 in Park City, UT; and the USDC Display Industry Investment Conference 2004 on March 24, 2004 in New York, NY.
About Applied Films Corporation
We are a leading provider of thin film deposition equipment to diverse markets such as the flat panel display, the architectural, automotive and solar glass, and the consumer products packaging and electronics industries. For more information, please visit our web site at http://www.appliedfilms.com/ .
Safe Harbor Statement
This press release contains forward-looking statements that involve substantial risks and uncertainties. Typically, these statements contain words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will" and "would" or similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position or state other "forward-looking" information. You are cautioned that forward-looking statements, including statements about future bookings, revenues and earnings, are not guaranties of future performance. There may be events in the future that we are not able to predict or control. Such risks and uncertainties include change in the demand for coating equipment, the effect of changing worldwide political and economic conditions on capital expenditures, the impact of SARS and the resulting limitation of travel to customers by company representatives, production levels, including those in Europe and Asia, the effect of overall market conditions and market acceptance risks. Other risks include those associated with dependence on suppliers, the impact of competitive products and pricing, technological and product development risks and other risk factors. As a result, our operating results may fluctuate, especially when measured on a quarterly basis. The forward-looking statements included in this release are made only as of the date of this release and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances. For further information, refer to our Securities and Exchange Commission filings, including our Forms 10-K and Forms 10-Q.
- FINANCIAL TABLES FOLLOW -
APPLIED FILMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
December 27, December 28, December 27, December 28,
2003 2002(1) 2003 2002(1)
Net revenues $57,106 $29,121 $104,780 $54,206
Cost of goods sold 42,930 22,861 77,590 41,300
Gross profit $14,176 $6,260 $27,190 $12,906
Operating expenses:
Selling, general
and administrative $6,442 $5,809 $12,687 $11,771
Research and
development 4,235 2,570 8,303 4,832
Amortization of
other intangible
assets 1,065 901 2,082 1,790
Income (loss) from
operations $2,434 $(3,020) $4,118 $(5,487)
Other (expense)
income:
Interest income
(expense) $671 $624 $900 $1,317
Other income
(expense) 452 240 1,091 373
Equity earnings of
joint venture 1,063 864 1,612 1,229
Income (loss) from
continuing operations
before income taxes $4,620 $(1,292) $7,721 $(2,568)
Income tax benefit
(expense) $(1,155) $711 $(2,076) $1,197
Income (loss) from
continuing
operations $3,465 $(581) $5,645 $(1,371)
Discontinued
operations(2):
Income from
discontinued
operations, net of
tax $-- $75 $(418) $91
Gain on disposal of
discontinued
operations, net of
tax 13 -- 783 429
Discontinued
operations, net of
tax 13 75 365 520
Net income (loss)
applicable to common
stockholders $3,478 $(506) $6,010 $(851)
Earnings (loss) per
share:
Basic:
Earnings (loss) from
continuing
operations $0.24 $(0.05) $0.44 $(0.12)
Income (loss) from
discontinued
operations 0.00 0.01 0.03 0.05
Basic earnings (loss)
per share $0.24 $(0.04) $0.47 $(0.07)
Diluted:
Earnings (loss) from
continuing
operations $0.24 $(0.05) $0.43 $(0.12)
Income (loss) from
discontinued
operations 0.00 0.01 0.03 0.05
Diluted earnings
(loss) per share $0.24 $(0.04) $0.46 $(0.07)
Weighted average
common shares
outstanding:
Basic 14,368 11,086 12,778 11,060
Diluted 14,699 11,086 13,089 11,060
(1) Amounts have been adjusted to show the operating results of the
Hong Kong Coated Glass Business, and the Longmont Coatings
Division, which were sold on September 26, 2003, and September 24,
2002, respectively, as discontinued operations.
(2) Reflects the operations and the gain recognized from the sale of
the Hong Kong Coated Glass Business, and the Longmont Coatings
Division which occurred on September 26, 2003, and September 24,
2002, respectively, as discontinued operations.
RECONCILIATION OF PRO-FORMA NON-GAAP MEASUREMENT TO GAAP
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
December 27, December 28, December 27, December 28,
2003 2002(1) 2003 2002(1)
Pro Forma
Financial Results:
Earnings (Loss)
Before Intangible
Amortization:
Income (loss) from
continuing
operations before
income taxes $4,620 $(1,292) $7,721 $(2,568)
Add: Amortization
of Other Intangible
Assets 1,065 901 2,082 1,790
Earnings (Loss)
from Continuing
Operations Before
Intangible
Amortization and
Taxes 5,685 (391) 9,803 (778)
Tax Benefit
(Provision) (2) (1,618) 439 (2,867) 702
Earnings (Loss)
from Continuing
Operations Before
Intangible
Amortization $4,067 $48 $6,936 $(76)
Pro forma earnings
per share:
Basic Pro forma EPS $0.28 $-- $0.54 $--
Diluted Pro forma
EPS $0.28 $-- $0.53 $--
Weighted Average
Common Shares
Outstanding:
Basic 14,368 11,086 12,778 11,060
Diluted 14,699 11,086 13,089 11,060
(1) Amounts have been adjusted to show the operating results of the
Hong Kong Coated Glass Business and Longmont Coatings Division,
which were sold on September 26, 2003, and September 24, 2002,
respectively, as discontinued operations.
(2) Taxes are calculated at 35% and equity earnings of joint venture
are non-taxable.
Note: Pro forma earnings are not intended to represent cash flows for
the period. Pro forma earnings should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with generally accepted accounting principles. Our
definition of pro forma earnings may differ from similar
measurements provided by other public companies.
APPLIED FILMS CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
December 27, June 28,
2003 2003(1)
ASSETS (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $39,816 $41,881
Marketable securities 147,749 51,620
Accounts and trade notes receivable,
net of allowance of $2,326 and $653,
respectively 18,214 10,838
Revenue in excess of billings 38,154 37,728
Inventories, net 5,382 6,731
Prepaid expenses and other 1,986 2,488
Current assets associated with
discontinued operations -- 1,344
Total current assets 251,301 152,630
Property, plant and equipment, net of
accumulated depreciation of $7,745
and $6,752, respectively 6,176 5,958
Goodwill and other intangible assets,
net of accumulated amortization of
$13,813 and $14,495 respectively 78,898 74,461
Investment in joint venture 13,353 11,889
Deferred tax asset, net 7,723 9,549
Other assets 240 255
Total assets $357,691 $254,742
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $12,601 $17,509
Accrued expenses 23,180 23,257
Billings in excess of revenue 9,065 16,773
Current portion of deferred gross
profit, deferred gain and lease
obligation 383 391
Deferred tax liability 4,900 5,407
Current liabilities associated with
discounted operations -- 536
Total current liabilities 50,129 63,873
Long-term portion of gross profit,
deferred gain and lease obligation 1,885 2,063
Accrued pension benefit obligation 12,841 11,608
Total liabilities $64,855 $77,544
STOCKHOLDERS' EQUITY:
Preferred Stock, no par value,
1,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, no par value,
40,000,000 shares authorized,
14,719,952 and 11,161,873 shares
issued and outstanding at
December 27, 2003, and June 28,
2003, respectively 255,586 160,685
Warrants and stock options 595 734
Other cumulative comprehensive income 26,371 11,504
Retained earnings 10,284 4,275
Total stockholders' equity 292,836 177,198
Total liabilities and stockholders'
equity $357,691 $254,742
(1) As adjusted to reclassify the assets and liabilities of the Hong
Kong Coated Glass Business to net assets associated with
discontinued operations for sale of the Hong Kong Coated Glass
Business on September 26,2003.