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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ceradyne, Inc. (MM) | NASDAQ:CRDN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 35.00 | 0 | 01:00:00 |
Sales for the fourth quarter 2010 were $100.7 million, compared with $97.6 million in the fourth quarter 2009. Net income for the fourth quarter 2010 was $13.2 million, or $0.53 per fully diluted share, compared to net income of $14.1 million, or $0.55 per fully diluted share in the fourth quarter 2009. Net income in the fourth quarter 2010 was favorably impacted by a tax benefit of $7.4 million, which included $5.4 million from the settlement of a claim for reapportionment of state income taxes and a benefit of $2.0 million from acquisition and restructuring charges. The fourth quarter 2010 results also include pre-tax charges totaling $5.2 million, comprised of $1.7 million for acquisition related charges and $3.5 million in restructuring charges due to the closure of the Company's hot press facility in Costa Mesa, California. The after-tax net impact of these items increased net income by $2.2 million during the fourth quarter 2010 or $0.09 per fully diluted share. Net income for the three months ended December 31, 2009 was favorably impacted by a tax benefit of $5.1 million, which included $3.8 million from the reversal of liabilities for uncertain tax positions due to the settlement of audits by the IRS in the fourth quarter and a tax benefit of $1.3 million resulting from the closure of the Company's Bazet, France, manufacturing facility, and losses from auction rate securities. The after-tax net impact of these items increased net income by $2.0 million during the fourth quarter of 2009, or $0.08 per fully diluted share.
Fully diluted average shares outstanding for the fourth quarter 2010 were 24,968,532 compared to 25,642,736 in the same period in 2009.
The Company is reiterating its guidance for the full fiscal year 2011 that was updated on January 10, 2011 to a range of $1.50 per fully diluted share to approximately $1.90 per fully diluted share and sales from $470.0 million to $540.0 million.
Gross profit margin was 32.8% of net sales in the fourth quarter 2010 compared to 27.0% in the same period in 2009.
Sales for the twelve months ended December 31, 2010 were $402.9 million, compared with $400.6 million in the same period last year. Net income for the twelve months ended December 31, 2010 was $29.3 million, or $1.15 per fully diluted share, compared with net income in the prior year of $8.5 million, or $0.33 per fully diluted share. Net income for the twelve months ended December 31, 2010 was favorably impacted by a tax benefit of $7.8 million, which included $5.4 million from the settlement of a claim for reapportionment of state income taxes and a benefit of $2.4 million from acquisition and restructuring charges and losses on auction rate securities. Full year 2010 results also include pre-tax charges totaling $6.1 million, comprised of $1.6 million for acquisition related charges, $3.5 million in restructuring charges due to the closure of the Company's hot press facility in Costa Mesa, California and $1.0 million from loss on auction rate securities. The after-tax net impact of these items increased net income by $1.7 million during the twelve months ended December 31, 2010 or $0.06 per fully diluted share.
Income from operations before acquisition and restructuring charges for the twelve months ended December 31, 2010 was $34.2 million compared to income from operations before acquisition and restructuring charges, and goodwill impairment charges of $23.7 million in 2009.
Net income for the twelve months ended December 31, 2009 was favorably impacted by a tax benefit of $13.5 million, which included $3.8 million from the reversal of liabilities for uncertain tax positions due to the settlement of audits by the IRS and a tax benefit of $9.7 million resulting from the closure of our Bazet, France, manufacturing facility, goodwill impairment and losses from auction rate securities, partially offset by an acquisition related credit. Net income for the twelve months ended December 31, 2009 included charges for restructuring and impairment, partially offset by an acquisition related credit, that had a negative impact by reducing fully diluted earnings per share by approximately $0.37 for the twelve months ended December 31, 2009. These items totaled $23.1 million during the twelve months ended December 31, 2009 which included a pre-tax $10.3 million restructuring charge for the closure of our plant in Bazet, France, $2.7 million in other severance expenses, a non-cash pre-tax impairment charge of $3.8 million to write down the value of goodwill of its Ceradyne Canada reporting unit, accelerated depreciation of $1.9 million resulting from a revision of the estimated useful lives of certain assets and losses of $5.2 million from auction rate securities, partially offset by an acquisition related credit of $0.8 million.
Gross profit margin was 26.8% of net sales in the twelve months ended December 31, 2010 compared to 25.4% in twelve months ended December 31, 2009.
New orders for the three months ended December 31, 2010 were $151.3 million, compared to $76.7 million for the same period last year. For the year ended December 31, 2010, new orders were $455.3 million, compared to $407.3 million for the comparable period last year.
Total backlog as of December 31, 2010 was $185.8 million, compared to total backlog at December 31, 2009 of $135.5 million.
Joel P. Moskowitz, Ceradyne president and chief executive officer, commented: "We are very pleased with our fourth quarter and full year 2010 financial performance. It allowed us to meet our 2010 guidance and laid the groundwork for continuing growth in sales and earnings for 2011.
"2010 was a year of transition for Ceradyne, with reduced reliance on defense related sales, offset by strong sales of our high purity fused silica ceramic crucibles used for the manufacture of photovoltaic solar cells, and a dramatic turnaround in our ESK Ceramics, Kempten, Germany operation."
Mr. Moskowitz continued, "Several recent events are anticipated to provide momentum to our growth in 2011 and beyond:
Mr. Moskowitz further remarked: "The increase in new orders and ending backlog in the fourth quarter should give us a good start to 2011. We continue to see excellent testing results on our Enhanced Combat Helmet (ECH) and increased interest in body armor requirements.
"We are producing strong cash flows, with year-end cash and short-term investments of $246 million.
"In summary, we enter 2011 as a diversified advanced technical ceramic company with a strong focus on energy related markets, including solar, nuclear power plants and oil and gas recovery. Although at a reduced level, our defense sales should grow modestly from 2010 levels, and the industrial ceramics market, particularly at our ESK Ceramics operation, is very encouraging."
Conference Call and Webcast Information
Ceradyne will host a conference call today at 8:00 a.m. PST (11:00 a.m. EST) to review the financial results for the fourth quarter and the year ended December 31, 2010. To participate in the teleconference, please call toll free 888-455-2263 (or 719-325-4930 for international callers) approximately 10 minutes prior to the above start time and provide Conference ID 9651153. Investors or other interested parties may listen to the teleconference live via the Internet at www.ceradyne.com or www.earnings.com. These web sites will also host an archive of the teleconference. A telephone playback will be available beginning at 11 a.m. PST on February 24, 2011 through 11 a.m. PST on February 26, 2010. The playback can be accessed by calling 888-203-1112 (or 719-457-0820 for international callers) and providing Conference ID 9651153.
Information about Ceradyne, Inc.
Ceradyne develops, manufactures and markets advanced technical ceramic products and components for defense, industrial, energy, automotive/diesel and commercial applications.
In many high performance applications, products made of advanced technical ceramics meet specifications that similar products made of metals, plastics or traditional ceramics cannot achieve. Advanced technical ceramics can withstand extremely high temperatures, combine hardness with light weight, are highly resistant to corrosion and wear, and often have excellent electrical capabilities, special electronic properties and low friction characteristics. Additional information can be found at the Company's web site: www.ceradyne.com.
Except for the historical information contained herein, 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 from those projected. Words such as "anticipates," "believes," "plans," "expects," "intends," "future," and similar expressions are intended to identify forward-looking statements. These risks and uncertainties are described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and its quarterly Reports on Form 10-Q, as filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date thereof.
To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), the table at the end of this press release includes a reconciliation between the non-GAAP financial measures discussed in this press release and the GAAP financial results. These non-GAAP financial measures exclude certain items and special charges, such as restructuring - plant closure and severance, impairment charges, acquisition related charges, and losses on auction rate securities. Management does not consider the excluded items part of day-to-day business or reflective of the core operational activities of the Company as they result from transactions outside the ordinary course of business. Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures, management intends to provide investors with a more meaningful, consistent comparison of the Company's core operating results and trends for the periods presented. Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.
CERADYNE, INC. CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, ------------------- ------------------- 2010 2009 2010 2009 --------- --------- --------- --------- (Unaudited) (Unaudited) NET SALES $ 100,719 $ 97,582 $ 402,938 $ 400,575 COST OF GOODS SOLD 67,686 71,239 295,078 298,956 --------- --------- --------- --------- Gross profit 33,033 26,343 107,860 101,619 OPERATING EXPENSES Selling, general and administrative 17,993 14,024 61,940 65,643 Research and development 2,961 2,746 11,692 12,258 Acquisition related charge (credit) 1,655 27 1,567 (768) Restructuring - plant closure and severance 3,498 993 3,505 12,924 Goodwill impairment - - - 3,832 --------- --------- --------- --------- 26,107 17,790 78,704 93,889 --------- --------- --------- --------- INCOME FROM OPERATIONS 6,926 8,553 29,156 7,730 --------- --------- --------- --------- OTHER INCOME (EXPENSE): Interest income 2,793 1,667 5,355 4,091 Interest expense (1,534) (1,650) (6,247) (7,119) Gain on early extinguishment of debt - - - 1,881 Loss on auction rate securities - (1,707) (978) (5,187) Miscellaneous 592 (285) 1,085 (979) --------- --------- --------- --------- 1,851 (1,975) (785) (7,313) --------- --------- --------- --------- INCOME BEFORE PROVISION FOR INCOME TAXES 8,777 6,578 28,371 417 PROVISION (BENEFIT) FOR INCOME TAXES (4,409) (7,503) (905) (8,098) --------- --------- --------- --------- NET INCOME $ 13,186 $ 14,081 $ 29,276 $ 8,515 ========= ========= ========= ========= BASIC INCOME PER SHARE $ 0.53 $ 0.55 $ 1.16 $ 0.33 ========= ========= ========= ========= DILUTED INCOME PER SHARE $ 0.53 $ 0.55 $ 1.15 $ 0.33 ========= ========= ========= ========= WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC 24,713 25,526 25,191 25,684 DILUTED 24,969 25,643 25,370 25,802
CERADYNE, INC. CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data) December 31, December 31, 2010 2009 ------------ ------------ (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 53,436 $ 122,154 Short-term investments 192,860 117,666 Restricted cash - 3,130 Accounts receivable, net of allowances for doubtful accounts of $685 and $851 at December 31, 2010 and December 31, 2009, respectively 53,019 53,269 Other receivables 17,553 11,424 Inventories, net 94,258 100,976 Production tooling, net 10,037 12,006 Prepaid expenses and other 38,653 19,932 Deferred tax asset 6,808 13,796 ------------ ------------ TOTAL CURRENT ASSETS 466,624 454,353 ------------ ------------ PROPERTY, PLANT AND EQUIPMENT, net 243,681 239,322 LONG TERM INVESTMENTS 26,187 20,019 INTANGIBLE ASSETS, net 83,475 89,409 GOODWILL 43,219 43,880 OTHER ASSETS 2,127 2,721 ------------ ------------ TOTAL ASSETS $ 865,313 $ 849,704 ============ ============ CURRENT LIABILITIES Accounts payable $ 25,738 $ 24,683 Accrued expenses 24,603 23,463 Income taxes payable 1,869 - ------------ ------------ TOTAL CURRENT LIABILITIES 52,210 48,146 LONG-TERM DEBT 85,599 82,163 EMPLOYEE BENEFITS 22,269 21,769 OTHER LONG TERM LIABILITY 41,902 39,561 DEFERRED TAX LIABILITY 11,124 8,348 ------------ ------------ TOTAL LIABILITIES 213,104 199,987 ------------ ------------ COMMITMENTS AND CONTINGENCIES (Note 13) SHAREHOLDERS' EQUITY Common stock, $0.01 par value, 100,000,000 authorized, 24,713,126 and 25,401,005 shares issued and outstanding at December 31, 2010 and December 31, 2009, respectively 247 254 Additional paid-in capital 141,973 157,679 Retained earnings 499,532 470,256 Accumulated other comprehensive income 10,457 21,528 ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 652,209 649,717 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 865,313 $ 849,704 ============ ============ CERADYNE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) Twelve Months Ended December 31, ------------------------ 2010 2009 ----------- ----------- (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 29,276 $ 8,515 ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Depreciation and amortization 36,148 35,146 Amortization of bond premium 620 - Non cash interest expense on convertible debt 3,436 3,643 Gain on early extinguishment of debt - (1,881) Payments of accreted interest on repurchased convertible debt - (2,957) Deferred income taxes 9,773 (1,572) Stock compensation 3,844 3,839 Losses on auction rate securities 978 5,187 Losses on other securities 328 - Goodwill impairment - 3,832 Loss on equipment disposal 2,992 514 Change in operating assets and liabilities (net of effect of businesses acquired): Accounts receivable, net (219) 12,170 Other receivables (6,056) (5,973) Inventories, net 4,810 2,513 Production tooling, net 1,896 2,587 Prepaid expenses and other assets (18,541) 3,731 Accounts payable and accrued expenses 1,789 3,946 Income taxes payable 1,193 (213) Other long term liability 2,280 (7,357) Employee benefits 1,588 2,103 ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 76,135 67,773 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (44,220) (14,534) Changes in restricted cash 3,130 (428) Purchases of marketable securities (122,927) (179,194) Proceeds from sales and maturities of marketable securities 39,489 73,170 Cash paid for acquisitions - (9,654) Proceeds from sale of equipment 969 72 ----------- ---------- NET CASH (USED IN) INVESTING ACTIVITIES (123,559) (130,568) ----------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of stock due to exercise of options 362 33 Excess tax benefit due to exercise of stock options (472) 149 Shares repurchased (19,766) (9,753) Reduction on long term debt - (20,239) ----------- ----------- NET CASH (USED IN) FINANCING ACTIVITIES (19,876) (29,810) ----------- ----------- EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS (1,418) (523) ----------- ----------- (DECREASE) IN CASH AND CASH EQUIVALENTS (68,718) (93,128) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 122,154 215,282 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 53,436 $ 122,154 =========== ===========
CERADYNE, INC. MARKET APPLICATION INFORMATION (Amounts in thousands, except percentages)
We categorize our products into five market applications. The tables below show the amount of our total sales of each market application and the percentage contribution in the different time periods.
Three Months Ended Twelve Months Ended December 31, December 31, ------------------------ ------------------------ 2010 2009 2010 2009 ----------- ----------- ----------- ----------- Defense $ 19,151 $ 39,646 $ 117,316 $ 198,733 Industrial 36,901 29,628 138,630 102,689 Energy 33,223 18,379 99,900 62,200 Automotive/Diesel 8,754 7,203 35,900 25,151 Commercial 2,690 2,726 11,192 11,802 ----------- ----------- ----------- ----------- Total $ 100,719 $ 97,582 $ 402,938 $ 400,575 =========== =========== =========== =========== Three Months Ended Twelve Months Ended December 31, December 31, ------------------------ ------------------------ 2010 2009 2010 2009 ----------- ----------- ----------- ----------- Defense 19.0% 40.6% 29.1% 49.6% Industrial 36.6 30.3 34.4 25.6 Energy 33.0 18.9 24.8 15.5 Automotive/Diesel 8.7 7.4 8.9 6.3 Commercial 2.7 2.8 2.8 3.0 ----------- ----------- ----------- ----------- Total 100.0% 100.0% 100.0% 100.0% =========== =========== =========== ===========
CERADYNE, INC. NON-GAAP FINANCIAL INFORMATION (Amounts in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, ------------------------- ------------------------ 2010 2009 2010 2009 ----------- ------------ ----------- ----------- (Unaudited) (Unaudited) GAAP income from operations $ 6,926 $ 8,553 $ 29,156 $ 7,730 1. Acquisition related charge (credit) 1,655 27 1,567 (768) 2. Restructuring, plant closure and severance 3,498 993 3,505 12,924 3. Goodwill impairment - - - 3,832 ----------- ------------ ----------- ----------- Non-GAAP income from operations before acquisition, restructuring and goodwill impairment charges $ 12,079 $ 9,573 $ 34,228 $ 23,718 =========== ============ =========== =========== GAAP net income $ 13,186 $ 14,081 $ 29,276 $ 8,515 Reconciling items: Gross profit Accelerated depreciation - 328 - 1,899 Special charges 1. Acquisition related charge (credit) 1,655 27 1,567 (768) 2. Restructuring, plant closure and severance 3,498 993 3,505 12,924 3. Goodwill impairment - - - 3,832 4. Loss on auction rate securities - 1,707 978 5,187 ----------- ------------ ----------- ----------- Total special charges 5,153 3,055 6,050 23,074 ----------- ------------ ----------- ----------- Provision for income taxes: Credit due settlement of a claim for reapportionment of state income taxes 8,286 - 8,286 - Increase in federal taxes due to credit for reapportionment of state income taxes (2,900) - (2,900) - ----------- ------------ ----------- ----------- Net tax effect due to reapportionment of state income taxes 5,386 - 5,386 - Reversal of liabilities for uncertain tax positions due to settlement of IRS audits - 3,823 - 3,823 Tax effect on other non-GAAP adjustments 2,033 1,243 2,387 9,649 ----------- ------------ ----------- ----------- Total tax effect on non- GAAP adjustments (A) 7,419 5,066 7,773 13,472 ----------- ------------ ----------- ----------- Non-GAAP net income $ 10,920 $ 12,070 $ 27,553 $ 18,117 =========== ============ =========== =========== Diluted non-GAAP income per share $ 0.44 $ 0.47 $ 1.09 $ 0.70 Increase (decrease) due to Non-GAAP adjustments 0.09 0.08 0.06 (0.37) ----------- ------------ ----------- ----------- Diluted GAAP income per share $ 0.53 $ 0.55 $ 1.15 $ 0.33 =========== ============ =========== =========== (A) The tax effect on pre-tax non-GAAP adjustments is calculated using the relevant tax jurisdictions' statutory tax rates.
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