Ceradyne, Inc. (Nasdaq:CRDN) reported financial results for the
third quarter and nine months ended September 30, 2006, including
record sales and record net income. Sales for third-quarter 2006
rose to a record $185.8 million from $94.4 million in third-quarter
2005. Net income for third-quarter 2006 increased to a record $36.9
million, or $1.34 per diluted share, compared to $13.3 million, or
$0.53 per diluted share, in the third quarter of 2005. Fully
diluted average shares outstanding for the third quarter were 27.5
million compared to 25.1 million in the same period in 2005. Gross
profit margin was 38.0% of net sales in third-quarter of 2006, up
from 36.9% in third-quarter of 2005. The provision for income taxes
was 31.7% in third-quarter 2006, compared to 35.2% in third-quarter
2005. Sales for the nine months ended September 30, 2006 reached a
record $484.2 million, up from $254.1 million in the same period
last year. Net income for the first nine months of 2006 increased
to a record $90.7 million, or $3.31 per diluted share, on 27.4
million shares, from $30.7 million, or $1.23 per diluted share, on
25.0 million shares, for the same nine-month period in 2005. New
bookings for the third quarter of 2006 were $138.3 million,
compared to $67.8 million for the same period last year. For the
first nine months of 2006, new bookings increased to a record
$416.5 million, compared to $242.8 million for the comparable
period last year. Total backlog as of September 30, 2006 was $209.1
million, compared to total backlog at September 30, 2005 of $189.6
million. Joel Moskowitz, Ceradyne president and chief executive
officer, commented: �The above record-setting results for third
quarter 2006 reflect the continuing strength and increased volume
of our body armor production in California and Lexington, Kentucky
in both ESAPI body armor and ESBI side plates. Additionally, the
2004 acquisition of ESK Ceramics (Kempten, Germany) has resulted in
a vertically integrated technical ceramic manufacturing process
from raw man-made powder to finished product, which is expected to
enable Ceradyne to meet future requirements in both military and
commercial production applications. �During the quarter, the
Company continued to staff and facilitize its Ceradyne Canada
operation in Chicoutimi, Quebec in order to begin production of
radioactive shielding components for nuclear waste containment
vessels, as well as other metal matrix composite (MMC-aluminum plus
ceramic) components for military applications. �In the past week,
Ceradyne broke ground in Tianjin, China for a wholly owned 105,000
square foot ceramic manufacturing facility designed to meet the
growing demand from within China for high purity ceramic crucibles
used in the manufacture of silicon photovoltaic solar cells. We
anticipate that this new plant will commence operations in early to
mid-2007. �The recent expansions in Canada and China are part of
our longer range strategy to increase our commercial businesses
with a worldwide focus.� Moskowitz added, �Our strong balance sheet
as of September 30, 2006 with $175 million in cash, cash
equivalents and short term investments provides us with the
financial resources to meet our strategic objectives of
acquisitions, as well as expansion of our commercial and military
businesses.� Ceradyne will host a conference call today at 8:00
a.m. PST to discuss its 2006 third quarter results and provide 2006
and 2007 guidance. 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 telephonic playback will be available beginning
at 11:30 a.m. PST on November 1 through 9:00 p.m. PST on November
3, 2006. The playback can be accessed by calling 800-642-1687 (or
706-645-9291 for international callers) and providing Conference ID
9853919. Ceradyne develops, manufactures and markets advanced
technical ceramic products and components for defense, industrial,
automotive/diesel and commercial applications. 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, 2005, 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 hereof. The Company
undertakes no obligation to update these forward-looking statements
to reflect subsequent events or circumstances. Below is a summary
of unaudited comparative results. Amounts in thousands except per
share data: Three Months Ended Nine Months Ended September 30,
September 30, 2006� 2005� 2006� 2005� � NET SALES $ 185,796� $
94,406� $ 484,159� $ 254,100� Cost of product sales 115,265�
59,576� 295,962� 164,823� GROSS PROFIT 70,531� 34,830� 188,197�
89,277� Operating expenses: Selling 5,678� 5,015� 17,368� 15,309�
General and administrative 8,744� 5,442� 26,117� 15,179� Research
and development 2,532� 2,037� 7,731� 5,641� 16,954� 12,494� 51,216�
36,129� � INCOME FROM OPERATIONS 53,577� 22,336� 136,981� 53,148�
Other income (expense): Other income 1,526� 129� 4,068� 528�
Interest (expense) (1,023) (1,872) (3,081) (4,987) 503� (1,743)
987� (4,459) INCOME BEFORE PROVISIONFOR INCOME TAXES 54,080�
20,593� 137,968� 48,689� Provision for income taxes 17,158� 7,254�
47,304� 17,965� NET INCOME $ 36,922� $ 13,339� $ 90,664� $ 30,724�
� Earnings per share, basic $ 1.37� $ 0.54� $ 3.37� $ 1.25�
Earnings per share, diluted $ 1.34� $ 0.53� $ 3.31� $ 1.23� �
Average shares outstanding, basic 27,000� 24,586� 26,887� 24,530�
Average shares outstanding, diluted 27,461� 25,092� 27,372� 25,006�
Condensed Consolidated Balance Sheets (in thousands): � September
30, 2006 December 31, 2005 � Cash, cash equivalents and investments
$ 175,507� $ 99,381� Other current assets 183,549� 155,836� Net
property, plant and equipment 175,291� 153,259� Other assets
27,523� 21,717� Total assets $ 561,870� $ 430,193� � Current
liabilities $ 65,094� $ 42,908� Long term debt 121,000� 121,000�
Non current liabilities 12,921� 11,229� Deferred tax liability
5,206� 4,536� Stockholders' equity 357,649� 250,520� Total
liabilities and stockholders' equity $ 561,870� $ 430,193�
Ceradyne, Inc. (Nasdaq:CRDN) reported financial results for the
third quarter and nine months ended September 30, 2006, including
record sales and record net income. Sales for third-quarter 2006
rose to a record $185.8 million from $94.4 million in third-quarter
2005. Net income for third-quarter 2006 increased to a record $36.9
million, or $1.34 per diluted share, compared to $13.3 million, or
$0.53 per diluted share, in the third quarter of 2005. Fully
diluted average shares outstanding for the third quarter were 27.5
million compared to 25.1 million in the same period in 2005. Gross
profit margin was 38.0% of net sales in third-quarter of 2006, up
from 36.9% in third-quarter of 2005. The provision for income taxes
was 31.7% in third-quarter 2006, compared to 35.2% in third-quarter
2005. Sales for the nine months ended September 30, 2006 reached a
record $484.2 million, up from $254.1 million in the same period
last year. Net income for the first nine months of 2006 increased
to a record $90.7 million, or $3.31 per diluted share, on 27.4
million shares, from $30.7 million, or $1.23 per diluted share, on
25.0 million shares, for the same nine-month period in 2005. New
bookings for the third quarter of 2006 were $138.3 million,
compared to $67.8 million for the same period last year. For the
first nine months of 2006, new bookings increased to a record
$416.5 million, compared to $242.8 million for the comparable
period last year. Total backlog as of September 30, 2006 was $209.1
million, compared to total backlog at September 30, 2005 of $189.6
million. Joel Moskowitz, Ceradyne president and chief executive
officer, commented: "The above record-setting results for third
quarter 2006 reflect the continuing strength and increased volume
of our body armor production in California and Lexington, Kentucky
in both ESAPI body armor and ESBI side plates. Additionally, the
2004 acquisition of ESK Ceramics (Kempten, Germany) has resulted in
a vertically integrated technical ceramic manufacturing process
from raw man-made powder to finished product, which is expected to
enable Ceradyne to meet future requirements in both military and
commercial production applications. "During the quarter, the
Company continued to staff and facilitize its Ceradyne Canada
operation in Chicoutimi, Quebec in order to begin production of
radioactive shielding components for nuclear waste containment
vessels, as well as other metal matrix composite (MMC-aluminum plus
ceramic) components for military applications. "In the past week,
Ceradyne broke ground in Tianjin, China for a wholly owned 105,000
square foot ceramic manufacturing facility designed to meet the
growing demand from within China for high purity ceramic crucibles
used in the manufacture of silicon photovoltaic solar cells. We
anticipate that this new plant will commence operations in early to
mid-2007. "The recent expansions in Canada and China are part of
our longer range strategy to increase our commercial businesses
with a worldwide focus." Moskowitz added, "Our strong balance sheet
as of September 30, 2006 with $175 million in cash, cash
equivalents and short term investments provides us with the
financial resources to meet our strategic objectives of
acquisitions, as well as expansion of our commercial and military
businesses." Ceradyne will host a conference call today at 8:00
a.m. PST to discuss its 2006 third quarter results and provide 2006
and 2007 guidance. 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 telephonic playback will be available beginning
at 11:30 a.m. PST on November 1 through 9:00 p.m. PST on November
3, 2006. The playback can be accessed by calling 800-642-1687 (or
706-645-9291 for international callers) and providing Conference ID
9853919. Ceradyne develops, manufactures and markets advanced
technical ceramic products and components for defense, industrial,
automotive/diesel and commercial applications. 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, 2005, 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 hereof. The Company
undertakes no obligation to update these forward-looking statements
to reflect subsequent events or circumstances. Below is a summary
of unaudited comparative results. Amounts in thousands except per
share data: -0- *T Three Months Ended Nine Months Ended September
30, September 30, 2006 2005 2006 2005 --------- --------- ---------
--------- NET SALES $185,796 $94,406 $484,159 $254,100 Cost of
product sales 115,265 59,576 295,962 164,823 --------- ---------
--------- --------- GROSS PROFIT 70,531 34,830 188,197 89,277
--------- --------- --------- --------- Operating expenses: Selling
5,678 5,015 17,368 15,309 General and administrative 8,744 5,442
26,117 15,179 Research and development 2,532 2,037 7,731 5,641
--------- --------- --------- --------- 16,954 12,494 51,216 36,129
--------- --------- --------- --------- INCOME FROM OPERATIONS
53,577 22,336 136,981 53,148 Other income (expense): Other income
1,526 129 4,068 528 Interest (expense) (1,023) (1,872) (3,081)
(4,987) --------- --------- --------- --------- 503 (1,743) 987
(4,459) INCOME BEFORE PROVISION FOR INCOME TAXES 54,080 20,593
137,968 48,689 Provision for income taxes 17,158 7,254 47,304
17,965 --------- --------- --------- --------- NET INCOME $36,922
$13,339 $90,664 $30,724 ========= ========= ========= =========
Earnings per share, basic $1.37 $0.54 $3.37 $1.25 Earnings per
share, diluted $1.34 $0.53 $3.31 $1.23 Average shares outstanding,
basic 27,000 24,586 26,887 24,530 Average shares outstanding,
diluted 27,461 25,092 27,372 25,006 *T -0- *T Condensed
Consolidated Balance Sheets (in thousands): September 30, 2006
December 31, 2005 ------------------ ----------------- Cash, cash
equivalents and investments $175,507 $99,381 Other current assets
183,549 155,836 Net property, plant and equipment 175,291 153,259
Other assets 27,523 21,717 ------------------ -----------------
Total assets $561,870 $430,193 ================== =================
Current liabilities $65,094 $42,908 Long term debt 121,000 121,000
Non current liabilities 12,921 11,229 Deferred tax liability 5,206
4,536 Stockholders' equity 357,649 250,520 ------------------
----------------- Total liabilities and stockholders' equity
$561,870 $430,193 ================== ================= *T
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