Chemfab Corporation Announces Record Sales and Earnings for Fiscal 1999, Before Fourth Quarter Special Charge.MERRIMACK, N.H.--(BUSINESS WIRE)--July 29, 1999-- Chemfab Corporation (NYSE NYSE See: New York Stock Exchange :CFA (Computer Fraud and Abuse Act of 1986) Signed into law in 1986, the CFA was a significant step forward in criminalizing unauthorized access to computer systems and networks. The Act applies to "federal interest computers" that include any system used by the U.S. ) today announced that sales and earnings, excluding the after-tax impact of the special charge in the fourth quarter, reached record levels for its fourth quarter and the full fiscal year ended June 30, 1999. Excluding the after-tax impact of the special charge, net income for the fourth quarter of fiscal 1999 rose to a record $3,803,000 or $0.48 per share diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , up 12% over the same quarter a year ago, and net income for the full fiscal year ended June 30, 1999 reached a record $11,939,000 or $1.49 per share diluted, up 12% over prior year. Revenues and earnings in the fourth quarter were impacted by forgone sales of $1.25 million in free merchandise supplied to accomplish strategic improvements to a marketing agreement as previously announced. Including the fourth quarter pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern special charge of $3,986,000, primarily associated with the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and streamlining of European operations and the cost of the merchandise supplied in connection with changes to the marketing agreement, net income for the fourth quarter was $800,000 or $0.10 per share diluted, and net income for the full fiscal year ended June 30, 1999 was $8,936,00 or $1.11 per share diluted. Worldwide sales for the year grew by 21% to a record $126.5 million from $104.5 million in the prior year. Gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. in the fourth quarter remained flat relative to the corresponding quarter a year ago. Gross profit margins for the year declined by slightly more than 1%, primarily as a result of the low margins associated with the sale of product to the Tent City The term tent city covers a wide variety of usually temporary housing made of tents. Tent cities may originate spontaneously or be planned. Tents may or may be not comfortable but usually lack plumbing and sanitary facilities which tend to be communal. project. Commenting on the results for the quarter and fiscal 1999, Dr. John W. Verbicky, Chemfab's President and Chief Executive Officer, said "Fiscal 1999 was a pivotal year for Chemfab in which we made significant investments to transform the Company's business to ensure our future growth and profitability, while continuing our track record of double-digit growth in operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before . During fiscal 1999, we invested in new and more efficient manufacturing capacity, redesigned our distribution system in Europe through acquisitions and recorded our first commercial sales of molded mold 1 n. 1. A hollow form or matrix for shaping a fluid or plastic substance. 2. A frame or model around or on which something is formed or shaped. 3. Something that is made in or shaped on a mold. silicone silicone, polymer in which atoms of silicon and oxygen alternate in a chain; various organic radicals, such as the methyl group, CH3, are bound to the silicon atoms. products into the personal health care market. We also initiated the streamlining of our European manufacturing into a one plant operation. Further, the pending acquisition of a major medical products company will accelerate and expand our market presence in the disposable silicone medical products market. While these activities resulted in large non-recurring costs in the last fiscal year, we expect these investments to provide significant returns to Chemfab in terms of top line and bottom line growth over the next three to five years." Dr. Verbicky added, "During fiscal year 2000, we will be focused on the integration and optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. of the assets we have acquired in fiscal 1999, and we will be aggressively pursuing market development opportunities which we have developed during the past year. We expect fiscal 2000 to be a solid and potentially very exciting year for Chemfab." Chemfab Corporation is a leader in the design, manufacture, fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. and marketing of value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. polymer-based products which deliver outstanding performance in severe service and highly specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. operating environments In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. . Chemfab manufactures a broad range of high performance polymer based, reinforced and unreinforced fluoroplastics, fluoroelastomers, silicone elastomers and adhesives. The Company's products include laminates, films, coated fabrics, and tapes. The Company also produces molded polymer products and fabricated fab·ri·cate tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates 1. To make; create. 2. To construct by combining or assembling diverse, typically standardized parts: finished articles from roll goods. Worldwide end use applications are in the food processing Food processing is the set of methods and techniques used to transform raw ingredients into food for consumption by humans or animals. The food processing industry utilises these processes. , biomedical bi·o·med·i·cal adj. 1. Of or relating to biomedicine. 2. Of, relating to, or involving biological, medical, and physical sciences. , protective clothing, electronics, communications, aerospace, architectural and other industrial markets and applications. NOTE: This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from those projected or suggested due to certain risks and uncertainties, including start-up type risks in the HPE (Home Premium Edition) See Windows Vista versions. Division, acquisition and transition challenges, assimilation Assimilation The absorption of stock by the public from a new issue. Notes: Underwriters hope to sell all of a new issue to the public. See also: Issuer, Underwriting Assimilation issues in the consolidation process, customer reaction to the acquisitions, and operational and other risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the combination of separate businesses. Additional information concerning certain other risks and uncertainties that could cause actual results to differ materially from those projected or suggested, is contained in the Company's other press releases and filings with the Securities and Exchange Commission (SEC) over the last 12 months, copies of which are available from the SEC or the Company upon request. The forward-looking statements contained herein represent the Company's judgment as of the date of this release, and the Company cautions readers not to place undue reliance on such statements. -0-
CHEMFAB CORPORATION
CONSOLIDATED INCOME STATEMENTS
Dollars in thousands, except Three Months Ended
per share amounts 30-Jun-99 30-Jun-98
(Unaudited) (Audited)
Net sales $ 28,899 $ 29,147
Gross profit 10,149 10,313
Gross margin % 35.1% 35.4%
Selling, general and
administrative expenses 4,642 4,334
Research and development 639 771
Other (income) expense, net 27 25
Special charges 3,986 0
Interest income, net 35 (125)
Income before taxes 820 5,308
Provision for income taxes 20 1,771
Net income $ 800 $ 3,537
Earnings per share of common stock:
-Basic $ 0.10 $ 0.45
-Diluted $ 0.10 $ 0.43
Weighted average common shares outstanding:
-Basic 7,759 7,834
-Diluted 7,942 8,166
Dollars in thousands, except Year-to-Date
per share amounts 30-Jun-99 30-Jun-98
(Unaudited)
Net sales $ 126,480 $ 104,460
Gross profit 41,772 35,880
Gross margin % 33.0% 34.3%
Selling, general and
administrative expenses 21,295 16,995
Research and development 3,568 3,005
Other (income) expense, net (55) 42
Special charges 3,986 0
Interest income, net 267 (359)
Income before taxes 12,711 16,197
Provision for income taxes 3,775 5,265
Net income $ 8,936 $ 10,932
Earnings per share of common stock:
-Basic $ 1.14 $ 1.38
-Diluted $ 1.11 $ 1.33
Weighted average common shares outstanding:
-Basic 7,806 7,898
-Diluted 8,038 8,213
CHEMFAB CORPORATION
CONSOLIDATED BALANCE SHEETS
Dollars in thousands 30-Jun-99 30-Jun-98
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $ 4,783 $ 11,099
Receivables:
Trade 25,020 20,946
Other 92 17
Costs and estimated earnings in excess of
billings on uncompleted contracts 958 1,373
Inventories 19,649 17,403
Prepaid expenses and other current assets 3,266 720
Deferred tax assets 1,248 730
Total current assets 55,016 52,288
Property, plant and equipment, at cost 59,418 50,260
Less: accumulated depreciation (29,466) (26,043)
Property, plant and equipment, net 29,952 24,217
Goodwill, net of amortization 19,185 9,926
Other assets 2,215 2,673
Total assets $ 106,368 $ 89,104
Current liabilities:
Accounts payable and accrued expenses $ 14,974 $ 12,307
Short term borrowings 11,028 0
Accrued income taxes 1,209 2,540
Billings in excess of costs and estimated
earnings on uncompleted contracts 250 151
Total current liabilities 27,461 14,998
Deferred tax liabilities 2,051 1,752
Shareholders' equity:
Common stock, par value $.10 733 869
Additional paid-in capital 26,829 25,008
Retained earnings 69,972 61,036
Treasury stock, at cost (19,012) (15,137)
Foreign currency translation adjustment (1,666) 578
Total shareholders' equity 76,856 72,354
Total liabilities and shareholders' equity $ 106,368 $ 89,104
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