Ceramic Industry News

Ceradyne Reports First Quarter Results (posted 4/25/08)

April 25, 2008
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Ceradyne, Inc. recently reported financial results for the first quarter ended March 31, 2008. Sales for first-quarter 2008 increased slightly to $188.5 million from $188.4 million in the first quarter of 2007. Net income for the first quarter of 2008 decreased 13.6% to $32.9 million, or $1.20 per fully diluted share, compared to $38.1 million, or $1.38 per fully diluted share, in the first quarter of 2007. Fully diluted average shares outstanding for first-quarter 2008 were 27,407,000, compared to 27,528,000 in the same period in 2007.

Gross profit margin was 37.9% of net sales in the first quarter of 2008, compared to 40.9% in the same period in 2007. The provision for income taxes was 36.3% in first-quarter 2008, compared to 36.1% in first-quarter 2007. New orders for first-quarter 2008 were $211.8 million, compared to $176.5 million for the same period last year. Total order backlog as of March 31, 2008, was $262.7 million, compared to $332.3 million at March 31, 2007.

Joel P. Moskowitz, Ceradyne president and chief executive officer, commented, “During the first quarter of 2008, we continued to make progress on our strategy of diversification through internal developments, as well as through possible acquisitions. A few brief highlights of Q1 include:
  • Tom Cole Appointed Vice President Business Development. Tom previously served as president of Minco, Inc., which we acquired on July 10, 2007. Tom’s entire career has been in engineering and senior management related to industrial ceramics. I believe he will be a catalyst in moving the company forward in 2008 on several acquisition opportunities.
  • Solar Energy Ceramic Crucibles. We continue to see increasing demand for our high-purity ceramic crucibles used in the manufacture of polycrystalline silicon for photovoltaic solar cells. We anticipate our proposed new 200,000-square-foot ceramic crucible manufacturing facility in Tianjin, China, will be in production early in 2009. This is in addition to the 98,000-square-foot ceramic crucible manufacturing facility we opened in 2007 in Tianjin, China.
  • Ceradyne Stock Repurchase Plan. On March 4, 2008, we announced that Ceradyne’s board had authorized the repurchase of up to $100 million worth of our common stock in the open market or in privately negotiated transactions. To date, we have purchased approximately 1 million shares at an average price of approximately $30 per share.
“On February 26, 2008, we provided the following guidance for all of 2008: sales range from $715 million to $836 million, and earnings range from $4.55 to $5.05 per fully diluted share. Based on our current new order rate, backlog and Q1 results, we are pleased to reiterate the above guidance. Due to the potential magnitude of the BULL™ combat vehicle program, as well as the five-year XSAPI/ESAPI proposal, neither of which has been awarded, we have provided the 2008 guidance with an unusually wide range. The lower range reflects all of our current business units (even though multi-year XSAPI/ESAPI orders will not be issued before Q3 2008), but does not include any production orders for the BULL combat vehicle. The higher end of the range includes the lower end plus production of the BULL combat vehicle in the second half of 2008.”

Ceradyne will host a conference call today (April 25) at 8:00 a.m. PDT (11:00 a.m. EDT) to review the financial results for the quarter ended March 31, 2008. To participate in the teleconference, call (877) 717-3046 or (706) 634-6364. Investors or other interested parties may listen to the teleconference live via the Internet at www.ceradyne.com or www.earnings.com. These websites will also host an archive of the teleconference. A telephonic playback will be available beginning at 11:00 a.m. PDT today through 9:00 p.m. PDT April 29, 2008. The playback can be accessed by calling (800) 642-1687 or (706) 645-9291 and providing conference ID 43635399.

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