Ceradyne, Inc. (Nasdaq:CRDN) (Company) today reported results for
the fourth quarter and twelve months ended December 31, 2005. Sales
for the fourth quarter 2005 increased 36.9% to a record $114.2
million from $83.4 million in the fourth quarter of 2004. Net
income for the fourth quarter 2005 increased 82.7% to a record
$16.1 million, or $.63 per diluted share, compared to net income of
$8.8 million, or $.35 per diluted share, in the fourth quarter of
2004. Fourth quarter 2005 net income included a non-recurring,
non-cash after tax expense of $1.7 million, or $.07 per diluted
share related to the write off of unamortized loan fees resulting
from the repayment in full of the Company's 2004 credit facility,
which was replaced with a fixed rate convertible bond issued in
December 2005. Fully diluted average shares outstanding for the
fourth quarter were 25,479,000, compared to 24,823,000 in the same
period in 2004. Gross profit margin increased to 36.7% of net sales
in the fourth quarter of 2005 from 31.3% of net sales in the fourth
quarter of 2004. The provision for income taxes was 34.6% in the
fourth quarter 2005, compared to 34.4% in the fourth quarter 2004.
Sales for the year ended December 31, 2005, increased to a record
$368.3 million, up 70.8% from $215.6 million in 2004. For the year
ended December 31, 2005, net income increased to $46.8 million, or
$1.86 per diluted share, on 25,107,000 average shares outstanding,
from $27.6 million, or $1.12 per diluted share, on 24,598,000
average shares outstanding, for the year ended December 31, 2004.
Net income for the year ended December 31, 2005 was up 69.7% over
last year, and earnings per diluted share for 2005 increased 66.1%
compared to 2004. Fourth quarter 2005 new orders were $200.9
million compared to $145.1 million in fourth quarter 2004. For the
year 2005, new orders were $443.6 million compared to $276.0
million in 2004. Total order backlog on December 31, 2005 was
$276.4 million compared to the prior year backlog of $199.9
million. Joel P. Moskowitz, Ceradyne chief executive officer,
commented: "In addition to the record fourth quarter 2005 operating
performance reported above, in December 2005 Ceradyne successfully
issued 2,070,000 shares of its common stock and $121,000,000 of a 2
7/8 percent fixed rate convertible bond. After underwriting fees
and expenses relating to these concurrent offerings, the Company
netted approximately $84.7 million related to the equity portion
and $116.8 million related to the convertible bond. We used
approximately $118.7 million to retire the floating rate debt we
had raised in 2004 related to our acquisition of ESK Ceramics, with
the balance of approximately $82.8 million intended for working
capital, capital expenditures and other general corporate purposes,
and possibly for acquisitions." Ceradyne's management will review
the financial results for the quarter and the year ended December
31, 2005, and provide an outlook on Ceradyne's business, including
providing updated 2006 guidance, in a conference call at 8 a.m. PST
today. Interested parties may listen to the teleconference live via
the Internet at www.ceradyne.com or www.Fulldisclosure.com. These
web sites will also host an archive of the teleconference. A
telephone playback will be available beginning 11:30 a.m. PST today
through midnight on March 2, 2006. The playback can be accessed by
calling 800-642-1687 (or 706-645-9291 for international callers)
and providing Conference ID 4684018. Ceradyne develops,
manufactures and markets advanced technical ceramic products and
components for defense, industrial, automotive/diesel and
commercial applications. Additional information about the Company
can be found at www.ceradyne.com. Except for the historical
information contained herein, this news 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 supplemental
prospectuses, dated December 13, 2005, as filed with the Securities
and Exchange Commission. -0- *T Below is a summary of unaudited
comparative results. Amounts in thousands except per share data.
Three Months Ended Year Ended December 31 December 31 2005 2004
2005 2004 ---- ---- ---- ---- NET SALES $114,153 $83,372 $368,253
$215,612 Cost of product sales 72,290 57,280 237,115 146,518
-------- ------- -------- -------- GROSS PROFIT 41,863 26,092
131,138 69,094 -------- ------- -------- -------- Operating
expenses: Selling 5,385 4,694 20,694 8,266 General and
Administrative 5,835 5,103 21,014 14,131 Research and Development
2,163 1,460 7,802 3,341 -------- ------- -------- -------- 13,383
11,257 49,510 25,738 -------- ------- -------- -------- INCOME FROM
OPERATIONS 28,480 14,835 81,628 43,356 Other income (expense):
Other income 326 (167) 854 2,224 Interest (expense) (4,265) (1,279)
(9,252) (1,661) -------- ------- -------- -------- (3,939) (1,446)
(8,398) 563 INCOME BEFORE PROVISION FOR INCOME TAXES 24,541 13,389
73,230 43,919 Provision for income taxes 8,487 4,604 26,452 16,346
-------- ------- -------- -------- NET INCOME $16,054 $8,785
$46,778 $27,573 ======== ======= ======== ======== Earnings per
share, basic $0.64 $0.36 $1.90 $1.14 Earnings per share, diluted
$0.63 $0.35 $1.86 $1.12 Avg. shares outstanding, basic 24,944
24,395 24,635 24,170 Avg. shares outstanding, diluted 25,479 24,823
25,107 24,598 Condensed Consolidated Balance Sheets (in thousands):
December 31, December 31, 2005 2004 -------- -------- Cash and Cash
Equivalents $91,542 $4,521 Short Term Investments 7,839 10,041
Other Current Assets 155,080 120,085 Net Property, Plant and
Equipment 153,259 162,278 Other Assets 21,717 19,429 --------
-------- Total Assets $429,437 $316,354 ======== ======== Current
Liabilities $40,739 $56,258 Long Term Debt 121,000 108,625 Non
Current Liabilities 11,229 10,735 Deferred Tax Liability 6,075
5,695 Stockholders' Equity 250,394 135,041 -------- -------- Total
Liabilities and Stockholders Equity $429,437 $316,354 ========
======== *T
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