Ceradyne, Inc. Reports First Quarter 2011 Financial Results

COSTA MESA, CA -- (Marketwire) -- 04/26/11 -- Ceradyne, Inc. (NASDAQ: CRDN) reported financial results for the first quarter ended March 31, 2011.

Sales for the first quarter 2011 were $150.1 million, compared with $110.0 million in the first quarter 2010. Net income for the first quarter 2011 increased to $23.6 million, or $0.94 per fully diluted share, compared to $5.0 million, or $0.20 per fully diluted share in the first quarter 2010. The net income for the first quarter 2011 included an acquisition related charge of $0.6 million or a reduction of approximately $0.01 to fully diluted earnings per share. The net income for the first quarter 2010 included a pre-tax charge for losses on auction rate securities of $1.9 million and an acquisition related credit of $84,000 which, combined, resulted in a reduction of approximately $0.04 to fully diluted earnings per share. Fully diluted average shares outstanding for the first quarter 2011 were 25,129,924 compared to 25,585,369 in the same period in 2010.

Taking into consideration the strong financial results in the first quarter of 2011 tempered by the continued uncertainty of body armor shipments in the latter part of the second half of 2011, the Company is increasing its 2011 full-year guidance to a range of $3.10 to $3.50 fully diluted earnings per share and a range of $570 million to $600 million in sales. The prior 2011 guidance issued on March 9, 2011 was $2.35 to $2.70 earnings per fully diluted share and $505 million to $560 million in sales.

Gross profit margin was 38.7% of net sales in the first quarter 2011 compared to 23.1% in the same period in 2010. The provision for income taxes was 32.3% in the first quarter 2011, compared to 23.5% in the first quarter 2010.

New orders for the first quarter 2011 were $231.7 million, compared to $105.7 million for the same period last year. Total order backlog as of March 31, 2011 was $267.4 million, compared to $130.8 million at March 31, 2010.

Joel P. Moskowitz, Ceradyne president and chief executive officer, commented: "We are extremely pleased with Ceradyne's first quarter performance. Almost all areas reflected an excellent start to 2011. New orders of $231.7 million and an order backlog of $267.4 million indicate a strong 2011, as these numbers are double the Q1 2010 results as well as reflect a positive book-to-bill ratio of 1.54:1.00. Perhaps the most encouraging Q1 operating result is the continuing increase in gross margins. These Q1 results and a cautiously optimistic outlook for the balance of 2011 are the basis for increasing our 2011 guidance."

Mr. Moskowitz further stated, "Our recently acquired VIOX operation continued to exceed internal expectations and we have committed to significantly increase its capacity in the field of bio-active materials in anticipation of increasing demand for VIOX materials as a component in consumer dental products.

"The new high purity fused silica ceramic solar crucible factory in Tianjin, China, commenced initial shipments of its crucibles to Ceradyne's key accounts for qualification in February and March. All Ceradyne customers who received initial crucibles from the new Tianjin factory have approved them for production quantities which will begin shipping in Q2, 2011.

"While the projected Enhanced Combat Helmet (ECH) procurement has been delayed, our outlook for the recently introduced PetroCeram® ceramic sand screens has strengthened."

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 first quarter ended March 31, 2011. To participate in the teleconference, please call toll free 800-949-2163 (or 719-325-2250 for international callers) approximately 10 minutes prior to the above start time and provide Conference ID 7738791. 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 April 26 through 11 a.m. PDT on April 28, 2011. The playback can be accessed by calling 888-203-1112 (or 719-457-0820 for international callers) and providing Conference ID 7738791.

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 March 31,
                                              ----------------------------
                                                  2011           2010
                                              -------------  -------------
                                                       (Unaudited)
NET SALES                                     $     150,102  $     110,038
COST OF GOODS SOLD                                   92,014         84,672
                                              -------------  -------------
  Gross profit                                       58,088         25,366
OPERATING EXPENSES
  Selling, general and administrative                18,836         13,904
  Acquisition related charge (credit)                   584            (88)
  Research and development                            3,067          2,944
                                              -------------  -------------
TOTAL OPERATING EXPENSES                             22,487         16,760
                                              -------------  -------------
INCOME FROM OPERATIONS                               35,601          8,606
                                              -------------  -------------
OTHER INCOME (EXPENSE):
  Interest income                                       798            899
  Interest expense                                   (1,448)        (1,586)
  Loss on auction rate securities                         -         (1,927)
  Miscellaneous                                         (87)           529
                                              -------------  -------------
                                                       (737)        (2,085)
                                              -------------  -------------
INCOME BEFORE PROVISION FOR INCOME TAXES             34,864          6,521
PROVISION FOR INCOME TAXES                           11,269          1,531
                                              -------------  -------------
NET INCOME                                    $      23,595  $       4,990
                                              =============  =============
NET INCOME PER COMMON SHARE:
BASIC                                         $        0.95  $        0.20
                                              =============  =============
DILUTED                                       $        0.94  $        0.20
                                              =============  =============
SHARES USED IN COMPUTING PER COMMON SHARE
 AMOUNTS:
BASIC                                                24,839         25,411
DILUTED                                              25,130         25,585





                           CERADYNE, INC.
                   CONSOLIDATED BALANCE SHEETS
            (Amounts in thousands, except share data)

                                                   March 31,   December 31,
                                                      2011         2010
                                                  ------------ ------------
                                                        (Unaudited)
CURRENT ASSETS
  Cash and cash equivalents                       $     49,085 $     53,436
  Short-term investments                               191,855      192,860
  Accounts receivable, net of allowances for
   doubtful accounts of $1,060 and $685 at
   March 31, 2011 and December 31, 2010,
   respectively                                         73,099       53,019
  Other receivables                                     20,829       17,553
  Inventories                                          101,509       94,258
  Production tooling, net                               18,831       10,037
  Prepaid expenses and other                            33,565       38,653
  Deferred tax asset                                     6,832        6,808
                                                  ------------ ------------
  TOTAL CURRENT ASSETS                                 495,605      466,624
PROPERTY, PLANT AND EQUIPMENT, net                     251,879      243,681
LONG TERM INVESTMENTS                                   20,186       26,187
INTANGIBLE ASSETS, net                                 105,432       83,475
GOODWILL                                                50,781       43,219
OTHER ASSETS                                             2,647        2,127
                                                  ------------ ------------
TOTAL ASSETS                                      $    926,530 $    865,313
                                                  ============ ============
CURRENT LIABILITIES
  Accounts payable                                $     27,536 $     25,738
  Accrued expenses                                      30,033       24,603
  Income taxes payable                                   3,217        1,869
                                                  ------------ ------------

  TOTAL CURRENT LIABILITIES                             60,786       52,210
LONG-TERM DEBT                                          86,489       85,599
EMPLOYEE BENEFITS                                       23,357       22,269
OTHER LONG TERM LIABILITIES                             54,477       41,902
DEFERRED TAX LIABILITY                                  11,776       11,124
                                                  ------------ ------------
TOTAL LIABILITIES                                      236,885      213,104
                                                  ------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 13)
STOCKHOLDERS' EQUITY
  Common stock, $0.01 par value, 100,000,000
   authorized, 24,893,158 and 24,713,126
   shares issued and outstanding at March 31,
   2011 and December 31, 2010, respectively                250          247
  Additional paid-in capital                           144,755      141,973
  Retained earnings                                    523,127      499,532
  Accumulated other comprehensive income                21,513       10,457
                                                  ------------ ------------
  TOTAL STOCKHOLDERS' EQUITY                           689,645      652,209
                                                  ------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $    926,530 $    865,313
                                                  ============ ============





                           CERADYNE, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (Amounts in thousands)

                                                       Three Months Ended
                                                            March 31,
                                                      --------------------
                                                        2011       2010
                                                      ---------  ---------
                                                          (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                          $  23,595  $   4,990
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
 PROVIDED BY OPERATING ACTIVITIES:
  Depreciation and amortization                           9,749      9,178
  Amortization of bond premium                              375          -
  Non cash interest expense on convertible debt             889        827
  Deferred income taxes                                     382        174
  Stock compensation                                        972        964
  Loss on marketable securities                             113      1,927
  Loss on equipment disposal                                 49          4
  Change in operating assets and liabilities (net
   of effect of businesses acquired):
    Accounts receivable, net                            (16,694)    (7,035)
    Other receivables                                    (2,984)    (8,863)
    Inventories                                          (2,502)     9,672
    Production tooling, net                              (3,424)     1,498
    Prepaid expenses and other assets                       477      3,300
    Accounts payable and accrued expenses                 4,222       (134)
    Income taxes payable                                  1,249          -
    Other long term liability                             1,086       (328)
    Employee benefits                                       205        140
                                                      ---------  ---------
NET CASH PROVIDED BY OPERATING ACTIVITES                 17,759     16,314
                                                      ---------  ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property, plant and equipment             (7,677)    (6,851)
  Changes in restricted cash                                  -      3,130
  Purchases of marketable securities                       (240)      (344)
  Proceeds from sales and maturities of marketable
   securities                                             7,000         12
  Proceeds from sale of equipment                         1,339        284
  Acquisition of business                               (27,673)         -
                                                      ---------  ---------
NET CASH USED IN INVESTING ACTIVITIES                   (27,251)    (3,769)
                                                      ---------  ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of stock due to exercise of
   options                                                  897         24
  Excess tax benefit due to exercise of stock
   options                                                1,771          7
                                                      ---------  ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES                 2,668         31
                                                      ---------  ---------
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS     2,473       (963)
                                                      ---------  ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS         (4,351)    11,613
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD           53,436    122,154
                                                      ---------  ---------

CASH AND CASH EQUIVALENTS, END OF PERIOD              $  49,085  $ 133,767
                                                      =========  =========





                           CERADYNE, INC.
                  SEGMENT FINANCIAL INFORMATION
                      (Amounts in thousands)

The financial information for all segments is presented below
(in thousands):

                                                       Three Months Ended
                                                            March 31,
                                                      --------------------
                                                        2011       2010
                                                      ---------  ---------

Revenue from External Customers
Advanced Ceramic Operations                           $  76,630  $  54,088
ESK Ceramics                                             40,123     31,748
Thermo Materials                                         31,111     19,847
Boron                                                     7,940      6,519
Inter-segment elimination                                (5,702)    (2,164)
                                                      ---------  ---------
Total                                                 $ 150,102  $ 110,038
                                                      =========  =========

Depreciation and Amortization
Advanced Ceramic Operations                           $   2,871  $   2,432
ESK Ceramics                                              3,139      3,303
Thermo Materials                                          1,686      1,345
Boron                                                     2,053      2,098
                                                      ---------  ---------
Total                                                 $   9,749  $   9,178
                                                      =========  =========

Segment Income (Loss) from Operations and
 Income before Provision for Income Taxes
Advanced Ceramic Operations                           $  17,014  $   2,823
ESK Ceramics                                              7,805      2,710
Thermo Materials                                         10,854      5,253
Boron                                                         -     (2,157)
Inter-segment elimination                                   (72)       (23)
                                                      ---------  ---------
Total segment income from operations                  $  35,601  $   8,606
Other expense                                              (737)    (2,085)
                                                      ---------  ---------
Total Income before Provision for Income Taxes        $  34,864  $   6,521
                                                      =========  =========

Segment Assets
Advanced Ceramic Operations                           $ 453,886  $ 416,875
ESK Ceramics                                            185,070    192,166
Thermo Materials                                        161,065    107,995
Boron                                                   126,509    128,223
                                                      ---------  ---------
Total                                                 $ 926,530  $ 845,259
                                                      =========  =========

Expenditures for Property, Plant & Equipment
Advanced Ceramic Operations                           $   1,400  $   1,500
ESK Ceramics                                                678        487
Thermo Materials                                          4,949      3,389
Boron                                                       650      1,475
                                                      ---------  ---------
Total                                                 $   7,677  $   6,851
                                                      =========  =========




                           CERADYNE, INC.
        OPERATING SEGMENT AND MARKET APPLICATION INFORMATION
                        (Amounts in thousands)


The tables below show, for each of our four operating segments, revenues
and operating income in the periods indicated.

Segment revenues (in millions):

                                             Three Months Ended March 31,
                                           -------------------------------
                                              2011       2010     Change
                                           ---------  ---------  ---------
Advanced Ceramic Operations                $    76.7  $    54.1       41.7%
ESK Ceramics                                    40.1       31.7       26.4%
Thermo Materials                                31.1       19.8       56.8%
Boron                                            7.9        6.5       21.8%
Inter-segment elimination                       (5.7)      (2.1)     162.8%
                                           ---------  ---------  ---------
Total                                      $   150.1  $   110.0       36.4%
                                           =========  =========  =========

Segment operating income (loss) (in millions):

                                             Three Months Ended March 31,
                                           -------------------------------
                                              2011       2010     Change
                                           ---------  ---------  ---------
Advanced Ceramic Operations                $    17.0  $     2.8      502.7%
ESK Ceramics                                     7.8        2.7      188.0%
Thermo Materials                                10.9        5.3      106.6%
Boron                                              -       (2.2)      n/m*
Inter-segment elimination                       (0.1)         -       n/m*
                                           ---------  ---------  ---------
Total                                      $    35.6  $     8.6      313.7%
                                           =========  =========  =========
* Not meaningful

We categorize our products into five market applications. The table below
shows our sales by market application and the percentage contribution to
our total sales of each market application in the different time periods.

                                       Three Months Ended March 31,
                                -------------------------------------------
                                        2011                  2010
                                --------------------- ---------------------
                                  Sales        %        Sales        %
                                ---------- ---------  ---------- ---------
Defense                         $     64.8      43.1  $     45.7      41.5
Industrial                            39.5      26.3        33.3      30.3
Energy                                33.1      22.1        18.7      17.0
Automotive/Diesel                      9.7       6.5         9.4       8.6
Commercial                             3.0       2.0         2.9       2.6
                                ---------- ---------  ---------- ---------
Total                           $    150.1    100.0 % $    110.0    100.0 %
                                ========== =========  ========== =========




                           CERADYNE, INC.
                  NON-GAAP FINANCIAL INFORMATION
            (Amounts in thousands, except per share data)

                                                       Three Months Ended
                                                            March 31,
                                                      --------------------
                                                        2011       2010
                                                      ---------  ---------
                                                          (Unaudited)
GAAP income from operations                           $  35,601  $   8,606
1. Acquisition related charge (credit)                      584        (88)

                                                      ---------  ---------
Non-GAAP income from operations before acquisition
 charges                                              $  36,185  $   8,518
                                                      =========  =========

GAAP net income                                       $  23,595  $   4,990

Reconciling items:
Special charges
1. Acquisition related charge (credit)                      584        (88)
2. Loss on auction rate securities                            -      1,927
                                                      ---------  ---------
Total special charges                                       584      1,839
                                                      ---------  ---------
Total tax effect on non-GAAP adjustments (A)               (231)      (726)
                                                      ---------  ---------
Non-GAAP net income                                   $  23,948  $   6,103
                                                      =========  =========

Diluted non-GAAP income per share                     $     .95  $     .24
Increase due to Non-GAAP adjustments                  $     .01  $     .04
                                                      ---------  ---------
Diluted GAAP income per share                         $     .94  $     .20
                                                      =========  =========

(A) The tax effect on pre-tax non-GAAP adjustments is calculated using
    the relevant tax jurisdictions' statutory tax rates.

Related Stocks:
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here

Portions of this content may be copy written by Fresh Brewed Media, Investors Observer, and/or O2 Media LLC. SmartReadMX and other related related technologies used to produce content for this service are covered by US Patents numbers 7,865,496, 7,856,390, and 7,716,116.