Ceradyne, Inc. (NASDAQ: CRDN) reported financial results for the
second quarter and six months ended June 30, 2011.
Sales for the second quarter 2011 were $145.4 million, compared
with $100.4 million in the second quarter 2010. Net income for the
second quarter 2011 increased to $19.1 million, or $0.76 per fully
diluted share, compared to a net income of $6.6 million, or $0.26
per fully diluted share in the second quarter 2010. Net income for
the second quarter 2011 included a pre-tax charge of $4.2 million
for temporary production issues that were identified and corrected
in the quarter. The net income for the second quarter 2010 included
a pre-tax gain on auction rate securities of $0.9 million or an
increase of approximately $0.03 to fully diluted earnings per
share. Fully diluted average shares outstanding for the second
quarter 2011 were 25,223,757 compared to 25,596,968 in the same
period in 2010.
The Company reiterated its 2011 full year guidance of a range of
$3.10 to $3.50 fully diluted earnings per share, and a range of
$570 million to $600 million in sales.
Gross profit margin was 36.4% of net sales in the second quarter
2011 compared to 25.7% in the same period in 2010. The provision
for income taxes was 34.8% in second quarter 2011, compared to a
provision for income taxes of 18.2% in the same period in 2010.
Sales for the six months ended June 30, 2011 were $295.5
million, compared with $210.5 million in the same period last year.
Net income for the six months ended June 30, 2011 was $42.7
million, or $1.70 per fully diluted share, on 25,171,897 shares,
compared to net income of $11.6 million, or $0.45 per fully diluted
share, on 25,575,889 shares in the prior year period.
Gross profit margin was 37.6% of net sales in the six months
ended June 30, 2011, compared to 24.3% in the same period in 2010.
The provision for income taxes was 33.4% in the six months ended
June 30, 2011, compared to a provision for income taxes of 20.5% in
the same period in 2010.
New orders for the three months ended June 30, 2011 were $108.8
million, compared to $87.6 million for the same period last year.
For the six months ended June 30, 2011, new orders were $340.5
million, compared to $193.3 million for the comparable period last
year.
Total backlog as of June 30, 2011 was $230.8 million, compared
to total backlog at June 30, 2010 of $118.0 million.
Total cash, cash equivalents and short-term investments
increased to $273.2 million at June 30, 2011, compared to $246.3
million at December 31, 2010.
Joel P. Moskowitz, Ceradyne president, chief executive officer
and chairman of the board, commented: "As stated above, management
remains comfortable with, and reiterates its guidance for the full
year 2011 of a range of $3.10 to $3.50 fully diluted earnings per
share and a range of $570 million to $600 million in sales as
announced by the Company on April 26, 2011. Although we experienced
somewhat less than expected shipments of photovoltaic related
ceramic crucibles in Q2 and anticipate some reduction in crucible
shipments from our original plan for the last half of 2011, the
recently announced $36.2 million ESAPI ceramic body armor award
along with continued strength in other parts of Ceradyne are
anticipated to allow us to meet our guidance.
"We are continuing to execute our stock buyback program. In Q2,
we bought back 100,000 Ceradyne shares for approximately $3.9
million or $38.89/share. Thus far, we have bought back 3,099,371
shares for $78.1 million or $25.20/share, leaving approximately
$21.9 million remaining in the original stock buyback plan."
Mr. Moskowitz further stated: "I am particularly pleased with
the implementation of our strategy of product, market and
geographic diversity. The continued strength of our German
operation, ESK Ceramics, contributed over 26% of our pre-tax
profits for the six months ended June 30, 2011. On August 8, ESK
will officially open its 40,000 square foot Tianjin, China
facility. This will be ESK's initial production facility in China,
and is anticipated to allow a stronger presence of its industrial
ceramic product line in China and Southeast Asia.
"We continue to view opportunities in oil and gas, nuclear
related boron, neutron absorbing ceramics for nuclear power plants,
defense related products and photovoltaic products as core growth
product lines."
Conference Call and Webcast Information
Ceradyne will host a conference call today at 8:00 a.m. PDT
(11:00 a.m. EDT) to review the financial results for the second
quarter ended June 30, 2011. To participate in the teleconference,
please call toll free 888-417-8516 (or 719-325-2359 for
international callers) approximately 10 minutes prior to the above
start time and provide Passcode 1694045. 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 12:00 p.m. PDT on July 26th
through 12:00 p.m. PDT on July 28th. The playback can be accessed
by calling 888-203-1112 (or 719-457-0820 for international callers)
and providing Passcode 1694045.
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.
CERADYNE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
(Unaudited) (Unaudited)
NET SALES $ 145,376 $ 100,415 $ 295,478 $ 210,453
COST OF GOODS SOLD 92,419 74,570 184,431 159,242
--------- --------- --------- ---------
Gross profit 52,957 25,845 111,047 51,211
OPERATING EXPENSES
Selling, general and
administrative 19,456 15,632 38,294 29,529
Acquisition related charge
(credit) 838 (31) 1,422 (119)
Research and development 3,214 3,174 6,281 6,118
Restructuring - plant
closure and severance - - - 7
--------- --------- --------- ---------
23,508 18,775 45,997 35,535
--------- --------- --------- ---------
INCOME FROM OPERATIONS 29,449 7,070 65,050 15,676
--------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest income 877 728 1,675 1,627
Interest expense (1,669) (1,609) (3,117) (3,195)
Gain (loss) on auction
rate securities - 949 - (978)
Miscellaneous 677 881 590 1,410
--------- --------- --------- ---------
(115) 949 (852) (1,136)
--------- --------- --------- ---------
INCOME BEFORE PROVISION FOR
INCOME TAXES 29,334 8,019 64,198 14,540
PROVISION FOR INCOME TAXES 10,203 1,456 21,472 2,987
--------- --------- --------- ---------
NET INCOME $ 19,131 $ 6,563 $ 42,726 $ 11,553
========= ========= ========= =========
BASIC INCOME PER SHARE $ 0.77 $ 0.26 $ 1.72 $ 0.45
========= ========= ========= =========
DILUTED INCOME PER SHARE $ 0.76 $ 0.26 $ 1.70 $ 0.45
========= ========= ========= =========
WEIGHTED AVERAGE SHARES
OUTSTANDING:
BASIC 24,898 25,431 24,869 25,421
DILUTED 25,224 25,597 25,172 25,576
CERADYNE, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
June 30, December 31,
2011 2010
------------ ------------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 44,463 $ 53,436
Short-term investments 228,710 192,860
Accounts receivable, net of allowances of
$4,682 and $685 at June 30, 2011 and
December 31, 2010, respectively 55,914 53,019
Other receivables 16,443 17,553
Inventories, net 111,241 94,258
Production tooling, net 18,314 10,037
Prepaid expenses and other 43,624 38,653
Deferred tax asset 6,917 6,808
------------ ------------
TOTAL CURRENT ASSETS 525,626 466,624
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, net 256,059 243,681
LONG TERM INVESTMENTS 16,903 26,187
INTANGIBLE ASSETS, net 103,870 83,475
GOODWILL 51,021 43,219
OTHER ASSETS 2,436 2,127
------------ ------------
TOTAL ASSETS $ 955,915 $ 865,313
============ ============
CURRENT LIABILITIES
Accounts payable $ 28,877 $ 25,738
Accrued expenses 29,665 24,603
Income taxes payable 5,456 1,869
------------ ------------
TOTAL CURRENT LIABILITIES 63,998 52,210
LONG-TERM DEBT 87,394 85,599
EMPLOYEE BENEFITS 24,034 22,269
OTHER LONG TERM LIABILITY 56,189 41,902
DEFERRED TAX LIABILITY 11,687 11,124
------------ ------------
TOTAL LIABILITIES 243,302 213,104
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 13)
SHAREHOLDERS' EQUITY
Common stock, $0.01 par value, 100,000,000
authorized, 24,852,780 and 24,713,126
shares issued and outstanding at June 30,
2011 and December 31, 2010, respectively 248 247
Additional paid-in capital 143,025 141,973
Retained earnings 542,258 499,532
Accumulated other comprehensive income 27,082 10,457
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 712,613 652,209
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 955,915 $ 865,313
============ ============
CERADYNE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Six Months Ended June 30,
--------------------------
2011 2010
------------ ------------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 42,726 $ 11,553
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 19,678 18,237
Amortization of bond premium 661 -
Non cash interest expense on convertible debt 1,795 1,670
Deferred income taxes 249 644
Stock compensation 2,026 1,969
Loss on marketable securities 103 978
Loss on equipment disposal 178 104
Change in operating assets and liabilities
(net of effect of businesses acquired):
Accounts receivable, net 914 9,069
Other receivables 1,638 (9,261)
Inventories, net (11,287) 16,340
Production tooling, net (2,866) 598
Prepaid expenses and other assets (9,600) 3,219
Accounts payable and accrued expenses 6,001 (4,667)
Income taxes payable 3,384 49
Other long term liability 2,762 (906)
Employee benefits 422 292
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 58,784 49,888
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (17,055) (19,172)
Changes in restricted cash - 3,130
Purchases of marketable securities (63,053) (95,380)
Proceeds from sales and maturities of
marketable securities 35,757 4,501
Cash paid for acquisitions (27,673) -
Proceeds from sale of equipment 1,442 406
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (70,582) (106,515)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock due to
exercise of options 991 36
Excess tax benefit due to exercise of
stock options 1,827 7
Shares repurchased (3,889) (3,379)
------------ ------------
NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES (1,071) (3,336)
------------ ------------
EFFECT OF EXCHANGE RATES ON CASH AND CASH
EQUIVALENTS 3,896 (3,275)
------------ ------------
DECREASE IN CASH AND CASH EQUIVALENTS (8,973) (63,238)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 53,436 122,154
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 44,463 $ 58,916
============ ============
CERADYNE, INC.
SEGMENT FINANCIAL INFORMATION
(Amounts in thousands)
The financial information for all segments is presented below
(in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Revenue from External Customers
Advanced Ceramic Operations $ 66,637 $ 41,375 $ 143,267 $ 95,463
ESK Ceramics 45,880 30,961 86,003 62,709
Thermo Materials 29,295 23,513 60,406 43,360
Boron 11,420 7,440 19,360 13,959
Inter-segment elimination (7,856) (2,874) (13,558) (5,038)
--------- --------- --------- ---------
Total $ 145,376 $ 100,415 $ 295,478 $ 210,453
========= ========= ========= =========
Depreciation and Amortization
Advanced Ceramic Operations $ 2,514 $ 2,396 $ 5,385 $ 4,828
ESK Ceramics 3,276 2,956 6,415 6,259
Thermo Materials 2,094 1,691 3,778 3,036
Boron 2,047 2,016 4,100 4,114
--------- --------- --------- ---------
Total $ 9,931 $ 9,059 $ 19,678 $ 18,237
========= ========= ========= =========
Segment Income (Loss) from
Operations and Income Before
Provision for Income Taxes
Advanced Ceramic Operations $ 14,041 $ (3,753) $ 31,055 $ (930)
ESK Ceramics 9,201 4,643 17,006 7,353
Thermo Materials 6,066 7,561 16,920 12,814
Boron 726 (1,350) 726 (3,507)
Inter-segment elimination (585) (31) (657) (54)
--------- --------- --------- ---------
Income from Operations 29,449 7,070 65,050 15,676
Other Income (Expense) (115) 949 (852) (1,136)
--------- --------- --------- ---------
Income before Provision for
Income Taxes $ 29,334 $ 8,019 $ 64,198 $ 14,540
========= ========= ========= =========
Segment Assets
Advanced Ceramic Operations $ 468,385 $ 410,987 $ 468,385 $ 410,987
ESK Ceramics 190,440 164,567 190,440 164,567
Thermo Materials 169,420 121,215 169,420 121,215
Boron 127,670 128,272 127,670 128,272
--------- --------- --------- ---------
Total $ 955,915 $ 825,041 $ 955,915 $ 825,041
========= ========= ========= =========
Expenditures for Property,
Plant & Equipment
Advanced Ceramic Operations $ 2,076 $ 2,091 $ 3,475 $ 3,591
ESK Ceramics 1,322 349 1,984 836
Thermo Materials 4,672 9,289 9,622 12,678
Boron 1,324 592 1,974 2,067
--------- --------- --------- ---------
Total $ 9,394 $ 12,321 $ 17,055 $ 19,172
========= ========= ========= =========
CERADYNE, INC.
MARKET APPLICATION INFORMATION
(Dollar amounts in millions)
We categorize our products into five market applications. The tables below
show our sales by market application and the percentage contribution to our
total sales of each market application in the different time periods.
Sales by Market Application:
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
2011 2010 Change 2011 2010 Change
-------- -------- -------- -------- -------- --------
Defense $ 55.9 $ 33.8 65.6% $ 120.6 $ 79.5 51.8%
Industrial 42.8 32.2 32.8% 82.3 65.5 25.5%
Energy 34.0 23.1 46.9% 67.1 41.9 60.5%
Automotive/Diesel 10.3 8.3 24.1% 20.0 17.7 12.9%
Commercial 2.4 3.0 (19.4%) 5.4 5.9 (8.0%)
-------- -------- -------- -------- -------- --------
Total $ 145.4 $ 100.4 44.8% $ 295.4 $ 210.5 40.4%
======== ======== ======== ======== ======== ========
Percentage Contribution:
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2011 2010 2011 2010
-------- -------- -------- --------
Defense 38.5% 33.7% 40.9% 37.8%
Industrial 29.4 32.1 27.8 31.2
Energy 23.3 23.0 22.7 19.9
Automotive/Diesel 7.1 8.2 6.8 8.4
Commercial 1.7 3.0 1.8 2.7
-------- -------- -------- --------
Total 100.0% 100.0% 100.0% 100.0%
======== ======== ======== ========
Ceradyne, Inc. (MM) (NASDAQ:CRDN)
Historical Stock Chart
From Apr 2024 to May 2024
Ceradyne, Inc. (MM) (NASDAQ:CRDN)
Historical Stock Chart
From May 2023 to May 2024
