Ceradyne, Inc. recently reported results for the first quarter ended March 31, 2002. Sales for the quarter rose 23% to a record $14.7 million from $11.9 million in the first quarter of 2001. Net income was $579,000, or 7 cents per basic and diluted share, compared to $1.19 million, or 14 cents per basic and diluted share, in the first quarter of 2001. The tax provision, combining federal and state tax rates, was 35% for the quarter, compared to 30% a year ago. New bookings for the quarter grew strongly, rising 21% to $14.2 million from $11.7 million in 2001. The company's order backlog at quarter end was $27.5 million, compared to the prior year backlog of $26.4 million. "Although shipments, new orders and backlog increased substantially from the year-ago period, gross margins declined," said Joel P. Moskowitz, president and CEO. "Margin pressure was caused by various costs associated with the threefold increase in diesel engine component shipments and a doubling of armor shipments. Additionally, the move to the recently leased 40,000-square-foot manufacturing facility in Irvine was delayed to the second quarter.
The company expects gradual margin improvement, as rising efficiencies along the 'learning curve' help to increase internal yields and, thereby, reduce production costs."