Ceradyne, Inc. (Nasdaq:CRDN) (Company) today reported results for
the fourth quarter and twelve months ended December 31, 2006. Sales
for the fourth quarter 2006 increased 56.6% to a record $178.7
million from $114.2 million in the fourth quarter of 2005. Net
income for the fourth quarter of 2006 increased 135.1% to a record
$37.7 million, or $1.38 per diluted share, compared to net income
of $16.1 million, or $0.63 per diluted share, in the fourth quarter
of 2005. Fully diluted average shares outstanding for the fourth
quarter were 27,443,000 compared to 25,479,000 in the same period
in 2005. Gross profit margin increased to 40.7% of net sales in the
fourth quarter of 2006 from 36.7% of net sales in the fourth
quarter of 2005. The provision for income taxes was 33.3% in the
fourth quarter 2006, compared to 34.6% in the fourth quarter of
2005. Sales for the year ended December 31, 2006, increased to a
record $662.9 million, up 80.0% from $368.3 million in 2005. For
the year ended December 31, 2006, net income increased to $128.4
million, or $4.69 per diluted share, on 27,352,000 average shares
outstanding, from $46.8 million, or $1.86 per diluted share, on
25,107,000 average shares outstanding, for the year ended December
31, 2005. Net income for the year ended December 31, 2006 was up
174.5% over last year, and earnings per diluted share for 2006
increased 152.2% compared to 2005. Fourth-quarter 2006 new orders
were $313.5 million compared to $200.9 million in fourth-quarter
2005. For the year 2006, new orders were $730.1 million compared to
$443.6 million in 2005. Total order backlog on December 31, 2006
was $344.3 million compared to the prior year backlog of $276.4
million. Joel P. Moskowitz, Ceradyne chief executive officer,
commented: �We are very pleased with our financial performance in
fourth-quarter 2006 as well as the full year. The record new
bookings in the fourth quarter of $313.5 million give us additional
visibility into 2007.� Moskowitz further stated, �We continue to
implement our strategy of product diversification on a global
scale. In the fourth quarter, we further equipped and staffed our
Chicoutimi, Quebec, Canada factory for producing nuclear waste
containment components combining Ceradyne�s neutron absorbing boron
carbide with structural aluminum. We also began construction of our
Tianjin, China factory designed to produce state-of-the-art ceramic
crucibles used in the manufacturing of polycrystalline silicon for
photovoltaic solar cells. We expect this new 98,000 sq. ft. plant
to be in production this summer.� Ceradyne�s management will review
the financial results for the quarter and the year ended December
31, 2006 and provide an outlook on Ceradyne�s business including
providing updated 2007 guidance in a conference call at 8:00 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 9 p.m. PST on February 28, 2007. The playback can be
accessed by calling 800-642-1687 (or 706-645-9291 for international
callers) and providing Conference ID 9128286. 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 Annual Report on Form
10-K for the fiscal year ended December 31, 2006, and its Quarterly
Reports on Form 10-Q, as filed with the Securities and Exchange
Commission. Below is a summary of unaudited comparative results.
Amounts in thousands except per share data. Three Months Ended Year
to Date as of December 31, December 31, 2006� 2005� 2006� 2005� �
Net sales $ 178,729� $ 114,153� $ 662,888� $ 368,253� Cost of
product sales � 106,029� � 72,292� � 401,991� � 237,115� Gross
profit � 72,700� � 41,861� � 260,897� � 131,138� Operating
expenses: Selling 5,551� 5,385� 22,919� 20,694� General and
administrative 9,176� 5,835� 35,293� 21,014� Research and
development � 2,178� � 2,161� � 9,909� � 7,802� � 16,905� � 13,381�
� 68,121� � 49,510� � Income from operations 55,795� 28,480�
192,776� 81,628� Other income (expense): Other income 1,820� 326�
5,888� 854� Interest (expense) � (1,024) � (4,265) � (4,105) �
(9,252) 796� (3,939) 1,783� (8,398) Income before provision for
income taxes 56,591� 24,541� 194,559� 73,230� Provision for income
taxes � 18,851� � 8,487� � 66,155� � 26,452� Net income $ 37,740� $
16,054� $ 128,404� $ 46,778� � � Earnings per share, basic $ 1.40�
$ 0.64� $ 4.77� $ 1.90� Earnings per share, diluted $ 1.38� $ 0.63�
$ 4.69� $ 1.86� � Avg. shares outstanding, basic 27,034� 24,944�
26,924� 24,635� Avg. shares outstanding, diluted 27,443� 25,479�
27,352� 25,107� � Condensed Consolidated Balance Sheets (in
thousands): � � December 31, 2006 � December 31, 2005 � Cash and
cash equivalents $ 13,547� $ 91,542� Short term investments
190,565� $ 7,839� Other current assets 197,863� $ 155,836� Net
property, plant and equipment 183,011� 153,259� Other assets �
28,829� � 21,717� Total assets $ 613,815� $ 430,193� � Current
liabilities $ 69,912� 42,908� Long term debt 121,000� 121,000� Non
current liabilities 13,274� 11,229� Deferred tax liability 3,018�
4,536� Stockholders' equity � 406,611� � 250,520� Total liabilities
and stockholders' equity $ 613,815� $ 430,193�
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