Chemfab Corporation Announces Revenues for the Third Quarter Up 22% Excluding the Tent City Project and Earnings Down At $0.23 Per Share Diluted.Business/Technology Editors MERRIMACK Merrimack, river, United States Merrimack, river, c.110 mi (180 km) long, formed at Franklin, S central N.H., by the junction of the Pemigewasset (rising in the White Mts.) and Winnipesaukee rivers. It flows S past Concord and Manchester into NE Mass. , N.H.--(BUSINESS WIRE)--April 18, 2000 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. and www.chemfab.com) today announced third quarter consolidated revenues of $33.9 million. Third quarter revenues reflect the absence of $16.6 million in revenues in the third quarter of the prior period from 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 and include $5.2 million of revenues from the Bivona acquisition. Consolidated net income for the third quarter, which ended March 26, 2000, was $1,739,000 or $0.23 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. , compared with $3,235,000 or $0.40 per share diluted for the same quarter a year ago. The Bivona acquisition made a modest but positive contribution to earnings in the quarter. The impact of the weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. Euro currency on earnings in the quarter was negative
by approximately $0.02 per share diluted relative to the prior year.
Stated in constant currency and excluding revenues from the Tent City project in the same quarter of the prior year, and excluding revenues from the Bivona acquisition in the current quarter, consolidated revenues for the quarter would have increased by 6.0% over the prior year. Strong revenue growth in the strategically important non-project related portions of the business was somewhat offset by lower project related revenues in the third quarter. Industrial and High Performance Elastomer elastomer (ĭlăs`təmər), substance having to some extent the elastic properties of natural rubber. The term is sometimes used technically to distinguish synthetic rubbers and rubberlike plastics from natural rubber. product sales (including Bivona) in the quarter increased by $7.4 million or 37% over the prior year. Industrial product sales in the quarter grew by $1.9 million or 10.3%, while project related revenues for architectural membranes membranes Obstetrics A popular term for the amniotic sac, see there (excluding revenues from the Tent City project) 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: systems decreased by $1.3 million or 16.6% versus prior year. In response to continued softness in the fabricated systems business, the Company has put in place a program to eliminate $700,000 in annual expenditures. Consolidated 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 quarter showed continued improvement at 34.7%, up from 30.9% in the prior year. Excluding the lower margin Tent City project in the prior year, gross profit margins would have been essentially unchanged despite the impact of significant manufacturing variances in the quarter. Gross profit margins in the quarter would have improved even further but were depressed by project specific unusual manufacturing costs and delays in completing the consolidation of European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. , which negatively impacted profitability in the quarter by nearly $1.3 million, or $0.12 per diluted share. The European consolidation was completed in March, and the conditions that led to the unusual manufacturing costs in the quarter have been addressed. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
For the thirty-nine weeks ended March 26, 2000, EBITDA was $2.09 per share diluted compared with $2.04 for the same period last year. Consolidated net income for the same period was $6,943,000 or $0.90 per share diluted compared with $8,136,000 or $1.01 per share diluted in the prior year. Worldwide sales through the first three quarters of fiscal 2000 were $91.1 million versus $97.6 million in the prior year. Excluding the revenues from the Tent City project in the prior year, worldwide sales year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. increased 17.1%. Measured in constant foreign currency rates, and excluding revenues from Tent City in the prior year, revenues on a year to-date basis increased by 20%. Gross profit year to-date increased to 34.9% up from 32.4% in the prior year. The balance sheet at the end of the third quarter reflects increased levels of inventory, receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and debt principally as a result of the acquisition of Bivona. Since the end of the third quarter, the Company has repaid $2.5 million of bank debt. John W. Verbicky, Chemfab's President and Chief Executive Officer, said, "The Company's ability to generate cash for debt service and other needs remains very strong." Commenting on the results for the third quarter, Dr. Verbicky said, "Despite the disappointing results for the quarter, we were very pleased with the top line growth of our industrial products business and the improvement in consolidated gross profit margins in the quarter, which are key elements in our strategy to rapidly and profitably grow the non-project related portions of our business. We were also pleased with the performance and contribution in the quarter of the Bivona acquisition completed at the end of December 1999. During the quarter we experienced significant unusual manufacturing costs associated with specific project related business and delays in the consolidation of our European operations, which adversely and significantly impacted net income in the quarter. The consolidation of our European operations is now complete and we have taken appropriate steps internally to address the manufacturing issues and the softness in the Fabricated Systems business that we experienced during the quarter." Commenting on the outlook for the balance of the year, Dr. Verbicky stated, "We expect fourth quarter earnings to return to a normal range somewhat tempered by the continued weakness of the Euro and softness in our fabricated systems business. Gross profit margins should continue to show the improvement we have seen throughout fiscal 2000. We should also begin to see some of the benefits of our European consolidation efforts in the fourth quarter and into fiscal 2001." 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 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. elastomers and adhesives. The Company's products include laminates, films, coated fabrics, and tapes. The Company also produces 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. polymer products and fabricated finished articles from roll goods. Worldwide end-use applications are in electrical, 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, other industrial markets and applications, medical electronics, personal care, healthcare, and specialty apparel markets. 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 transition and 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 regarding the Company's recent acquisitions and operational and other risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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). of the Company's European operations and its fabricated systems business. 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
Third Quarter Earnings Announcement, Fiscal 2000
CHEMFAB CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) March 26, June 30,
2000 1999
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $ 7,092 $ 4,783
Receivables:
Trade 31,052 25,020
Other 294 92
Inventories 25,899 19,649
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,509 958
Prepaid expenses and other current assets 1,872 3,266
Deferred tax assets 3,384 1,248
Total current assets 71,102 55,016
Property, plant and equipment, at cost 64,889 59,418
Less: accumulated depreciation (31,568) (29,466)
Property, plant and equipment, net 33,321 29,952
Goodwill, net of amortization 34,682 19,297
Other assets 8,367 2,103
Total assets $ 147,472 $ 106,368
Current liabilities:
Accounts payable and accrued expenses $ 19,322 $ 14,974
Short term borrowings 19,441 11,028
Accrued income taxes 2,578 1,209
Billings in excess of costs and estimated
earnings on uncompleted contracts 73 250
Total current liabilities 41,414 27,461
Long-term debt 24,000 --
Deferred tax liabilities 2,394 2,051
Other liabilities 856 --
Shareholder's equity:
Common stock, par value $.10 888 883
Additional paid-in capital 27,621 26,829
Retained earnings 76,915 69,972
Treasury stock, at cost (23,932) (19,012)
Accumulated other comprehensive income (2,684) (1,816)
Total shareholder's equity 78,808 76,856
Total liabilities and shareholders' equity $ 147,472 $ 106,368
Third Quarter Earnings Announcement, Fiscal 2000
CHEMFAB CORPORATION
CONSOLIDATED INCOME STATEMENTS
Three Months Ended
Dollars in thousands,
except per share amounts March 26, March 28,
2000 1999
(Unaudited)
Net sales $ 33,942 $ 44,457
Gross profit 11,790 13,723
Gross margin % 34.7% 30.9%
Selling, general and administrative expenses 7,150 7,328
Research and development 1,353 1,273
Other expense (income), net 86 78
Interest expense (income), net 717 360
Income before taxes 2,484 4,684
Provision for income taxes 745 1,449
Net income $ 1,739 $ 3,235
Earnings per share of common stock:
- Basic $ 0.23 $ 0.41
- Diluted $ 0.23 $ 0.40
Weighted average common shares outstanding:
- Basic 7,506 7,819
- Diluted 7,607 8,034
Year-to-Date
March 26, March 28,
2000 1999
(Unaudited)
Net sales $ 91,089 $ 97,581
Gross profit 31,834 31,623
Gross margin % 34.9% 32.4%
Selling, general and administrative expenses 17,947 16,653
Research and development 2,934 2,930
Other expense (income), net 198 (82)
Interest expense (income), net 836 231
Income before taxes 9,919 11,891
Provision for income taxes 2,976 3,755
Net income $ 6,943 $ 8,136
Earnings per share of common stock:
- Basic $ 0.91 $ 1.04
- Diluted $ 0.90 $ 1.01
Weighted average common shares outstanding:
- Basic 7,604 7,822
- Diluted 7,736 8,069
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