CoorsTek Reports Earnings of Four Cents Per Share.Business Editors/High-Tech Writers GOLDEN, Colo.--(BUSINESS WIRE)--Oct. 29, 2002 CoorsTek, Inc. (Nasdaq:CRTK CRTK Community Right-To-Know ), a leading designer and manufacturer of critical components and integrated assemblies for the semiconductor capital equipment industry and other high technology markets, today announced financial results for the third quarter of 2002. The Company reported earnings of four cents per 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. share on revenue of $99.6 million compared with a loss of 77 cents per diluted share and revenue of $80.6 million in the corresponding period of 2001. On a sequential One after the other in some consecutive order such as by name or number. basis, revenue increased by ten percent versus revenue of $90.2 million and a net loss of 20 cents per diluted share in the second quarter of 2002. For the third quarter of 2002, CoorsTek reported a year-over-year improvement in gross margin to 16.8 percent from 9.5 percent. Cost reductions and higher capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. contributed to this increase. Second-quarter 2002 gross margin equaled 15.1 percent. "Although we remain in a challenging economic environment, we are pleased with CoorsTek's third-quarter results, as they effectively demonstrate our continued ability to generate cash and improve earnings on modest revenue gains as a result of our lowered cost structure," stated John K. Coors COORS COmmunications Outage Restoration Section COORS Common Open Order Record System , CoorsTek's Chairman, President and Chief Executive Officer. "Because we expect lower revenue in the fourth quarter, particularly from the semiconductor capital equipment industry, we are continuing to focus on optimizing our operations and cost structure, managing cash and gaining market share. We believe these strategic actions will position us well for any strengthening in market conditions." Third-quarter selling, general, and administrative expense (SG&A) as a percentage of sales equaled 11.3 percent versus 15.6 percent in the prior year's third quarter, and 13.4 percent in the second quarter of 2002. The benefits of the Company's cost reduction measures were primarily responsible for the sequential decrease. Additionally, the elimination of goodwill amortization of $710,000 as a result of the adoption of FAS 142 contributed to the year-over-year decrease. Research and development (R&D) for the third quarter of 2002 was $2.8 million compared with $2.4 million in the third quarter of 2001 and $2.7 million in the second quarter of 2002. Revenue and gross margins in each of CoorsTek's three reportable segments improved sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . Heightened demand for CoorsTek's products and services, spurred by the ongoing outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. trend in the semiconductor capital equipment industry, is primarily responsible for the revenue gains in the Company's Semiconductor Components and Semiconductor Assembly segments. The gross profit improvements in these two segments are largely a result of greater facility utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be rates because of the higher sales. In the Advanced Materials Advanced Materials is a leading peer-reviewed materials science journal published every two weeks. Advanced Materials includes Communications, Reviews, and Feature Articles from the cutting edge of materials science, including topics in chemistry, physics, segment, the majority of the growth in revenue and margins is a result of increased business with InVision Technologies InVision Technologies, Inc. was a publicly traded company based in Newark, California, that manufactured and sold airport security screening devices to detect explosives in passenger baggage. One of its most well-known products is the CTX explosive-detection device. . On a year-over-year comparative basis, all three segments also posted improvements in revenue and gross profit. For the nine-month period ending September September: see month. 30, 2002, revenue decreased 20.0 percent from the prior-year period to $264.3 million and gross margins declined to 14.2 percent from 17.5 percent mainly as a result of decreased revenue and a higher percentage of sales from assembly services. SG&A for the first nine months of 2002 decreased slightly as a percentage of sales to 12.8 percent from 13.0 percent for the prior year's corresponding period. For the nine months ended September 30, 2002, CoorsTek recorded a net loss before the cumulative effect of a change in accounting principle of $6.6 million, or $0.59 per diluted share. Including the cumulative effect of a change in accounting principle, the Company lost $19.9 million, or $1.78 per share, versus a loss of $5.9 million, or $0.55 per share in the year earlier period. CoorsTek's balance sheet continued to strengthen during the third quarter with cash increasing from June June: see month. 30, 2002, by $3.3 million to $53.7 million. Cash at year end 2001 totaled $11.7 million. Additionally, the Company continues to focus on optimizing working capital, and has decreased inventories by 13.4 percent since December December: see month. 31, 2001. Third Quarter and Recent Highlights Recently, CoorsTek continued or completed several strategic initiatives. Specifically, the Company: -- Signed another multi-year contract with a leading semiconductor capital equipment OEM best known for its ion implant capabilities. Under the terms of the contract, CoorsTek will be responsible for the machining of major metal components in the company's linear accelerator for ion implant. In addition, CoorsTek will provide some assembly services for this equipment. The first order for this equipment has already been received and the program is currently in production. -- Increased its involvement with InVision Technologies by gaining additional business in regard to their 9000CTX series machines. CoorsTek will now manage the entire supply chain for the 9000 series along with the supply chains for the 2500 and 5500 series models. Also included in the revised and expanded contract, CoorsTek is performing assembly of the subsystems for all of the in-feed and out-feed sections of the 9000 series models and is currently training employees to perform complete assembly and test of the 9000 series machine. The two companies expect to finalize the contract in early November. -- Progressed with its efforts to gain market share by adding three programs to the revenue-generating alpha and production stages of development, bringing to 39 the total number of programs in these stages at the end of the third quarter. Fourth-Quarter Outlook For the fourth quarter of 2002, CoorsTek expects sequential declines in revenue in each of its three segments and an overall decrease in revenue of ten percent to 15 percent. As a result of continuing weakness in the general economy, revenue in the Advanced Materials segment will be flat to down five percent in the fourth quarter. In line with current semiconductor capital equipment industry projections for the fourth quarter, which include anticipated customer shut-downs, the Company is forecasting a sequential drop of 20 percent to 25 percent in combined revenue for its Semiconductor segments, with the components segment falling less as a result of relative strength in the spares business. The Company expects gross margin to be in the 14 percent to 16 percent range, with the sequential decrease caused in part by further inventory reductions and lower capacity utilization. R&D as a percentage of revenue will remain fairly constant, while SG&A is expected to increase to a range of 12 percent to 14 percent of sales. CoorsTek designs and manufactures components, integrated assemblies, and automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. systems for the semiconductor capital equipment market and other high technology applications. Using technical ceramics ceramics (sərăm`ĭks), materials made of nonmetallic minerals that have been permanently hardened by firing at a high temperature, or objects made of such materials. , precision-machined metals, high performance plastics and ultra-pure fused quartz fused quartz n. See quartz glass. , the Company's engineered solutions enable its customers' products to overcome technological barriers and improve performance. For additional information on CoorsTek, visit the Company's website at www.coorstek.com. The CoorsTek conference call is scheduled for today at 4:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. and can be accessed via the CoorsTek website at www.coorstek.com. A webcast replay of the call will be available until November November: see month. 5, 2002. Certain statements in this Press Release constitute "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 Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve known or unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of CoorsTek to be materially different from any future results, performance, or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by the forward-looking statements. Specifically, CoorsTek's ability in the semiconductor components, semiconductor assembly and advanced materials segments to achieve revenue, margin, and expense targets may be affected by continued or increased weakness in semiconductor, telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , and other markets CoorsTek serves, significant changes in orders for products that we assemble for our customers, as well as other operating factors such as costs of raw materials, labor, and power, costs associated with capital expenditures or acquisitions, changes in interest or currency exchange rates, environmental and other regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. compliance expenses, other unforeseen expenses, competitive activity, customers' outsourcing needs and product orders, and general business and economic conditions. More detailed information regarding risks and uncertainties is available in CoorsTek's Registration Statement on Form S-1 (No. 333-38824), as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and CoorsTek's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , both filed with the Securities and Exchange Commission, which are available free of charge at the Commission's website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. .
COORSTEK, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per-share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Sales $ 99,571 $ 80,562 $264,330 $330,329
Cost of goods sold 82,856 72,927 226,698 272,526
------- ------- ------- -------
Gross profit 16,715 7,635 37,632 57,803
Gross margin 16.8% 9.5% 14.2% 17.5%
Research and development 2,772 2,408 7,857 8,436
Selling, general and
administrative 11,270 12,599 33,822 42,938
Asset impairment charge - 1,436 - 1,436
Retirement plan curtailment
expense - - - 5,679
------- ------- ------- -------
Operating income (loss) 2,673 (8,808) (4,047) (686)
2.7% -10.9% -1.5% -0.2%
Interest expense 1,996 3,024 6,383 7,532
Income (loss) before income
taxes, extraordinary loss
and cumulative effect of
change in accounting
principle 677 (11,832) (10,430) (8,218)
Income tax expense (benefit) 246 (4,319) (3,808) (3,000)
Income (loss) before
extraordinary loss and
change in accounting
principle 431 (7,513) (6,622) (5,218)
Loss on debt extinguishment,
net of tax - (636) - (636)
Income (loss) before
cumulative effect of
change in
accounting principle 431 (8,149) (6,622) (5,854)
Cumulative effect of change
in accounting principle,
net of tax - - (13,243) -
Net income (loss) $ 431 $ (8,149) $(19,865) $ (5,854)
======= ======= ======= =======
Net income (loss) per
basic share of common
stock:
Income (loss) before
extraordinary loss
and cumulative effect
of change in
accounting principle $ 0.04 $ (0.71) $ (0.59) $ (0.49)
Loss on debt
extinguishment,
net of tax - (0.06) - (0.06)
Cumulative effect of
change in accounting
principle, net of tax - - (1.19)(2) -
Net income (loss) per
basic share of common
stock $ 0.04 $ (0.77) $ (1.78) $ (0.55)
======= ======= ======= =======
Weighted average shares
outstanding -- basic 11,735 10,643 11,159 10,604
======= ======= ======= =======
Net income (loss) per
diluted share of common
stock:
Income (loss) before
extraordinary loss
and cumulative effect
of change in
accounting principle $ 0.04 $ (0.71) $ (0.59) $ (0.49)
Loss on debt
extinguishment,
net of tax - (0.06) - (0.06)
Cumulative effect of
change in accounting
principle, net of tax - - (1.19)(2) -
Net income (loss) per
diluted share of common
stock $ 0.04 $ (0.77) $ (1.78) $ (0.55)
======= ======= ======= =======
Weighted average shares
outstanding -- diluted 11,753 10,643 11,159(1) 10,604
======= ======= ======= =======
(1) The diluted share base for the nine months ended September 30,
2002, excludes incremental shares of 164,232, related to stock
options. These shares are excluded due to their antidilutive effect as
a result of the Company's net loss.
(2) Goodwill impairment associated with the Plastics and
Semiconductor Components reporting units due to the completion of the
transitional goodwill impairment test related to the adoption of FAS
142.
COORSTEK, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
September 30, December 31,
2002 2001
---- ----
ASSETS
Current assets:
Cash $ 53,686 $ 11,684
Accounts receivable 39,766 35,829
Inventories 61,708 71,287
Other assets 15,393 21,287
------- -------
Total current assets 170,553 140,087
Properties, net 150,297 150,514
Other noncurrent assets 63,568 67,651
------- -------
Total assets $384,418 $358,252
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of debt $ 3,378 $ 2,675
Accounts payable 24,036 8,075
Other current liabilities 29,578 24,971
------- -------
Total current liabilities 56,992 35,721
Long-term debt 100,933 103,656
Other long-term liabilities 48,423 54,544
------- -------
Total liabilities 206,348 193,921
Stockholders' equity 178,070 164,331
Total liabilities and stockholders'
equity $384,418 $358,252
======= =======
COORSTEK, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
Nine Months Ended
September 30,
2002 2001
---- ----
Cash flows from operating activities:
Net income (loss) $(19,865) $ (5,854)
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 16,855 18,260
Loss on disposal of properties 171 506
Asset impairment charge - 1,436
Cumulative effect of change in
accounting principle, net of tax 13,243 -
Retirement plan curtailment
expense - 5,679
Change in current assets, current
liabilities and other:
Accounts receivable (3,937) 34,016
Inventories 9,579 6,356
Accounts payable 15,961 (18,142)
Accrued liabilities and other (3,508) (26,977)
------- -------
Net cash provided by operating
activities 28,499 15,280
------- -------
Cash flows from investing activities:
Additions to properties (9,076) (22,373)
Purchase of property previously
leased (7,762) -
Acquisitions, net of cash acquired - (1,516)
Other - (58)
------- -------
Net cash used in investing
activities (16,838) (23,947)
Cash flows from financing activities:
Proceeds from issuance of debt - 161,677
Payments on debt (2,020) (152,974)
Proceeds from the issuance of stock 32,361 2,047
------- -------
Net cash provided by financing
activities 30,341 10,750
------- -------
Cash and cash equivalents:
Net increase in cash and cash
equivalents 42,002 2,083
Balance at beginning of period 11,684 -
Balance at end of period $ 53,686 $ 2,083
======= =======
COORSTEK, INC.
SEGMENT INFORMATION
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Net Sales:
Semiconductor
Components $ 21,285 $ 17,001 $ 57,644 $ 93,659
Semiconductor Assembly 22,547 10,307 52,705 52,991
Advanced Materials 55,739 53,254 153,981 183,679
------- ------- ------- -------
$ 99,571 $ 80,562 $264,330 $330,329
======= ======= ======= =======
Gross Profit:
Semiconductor
Components $ 3,006 $ (3,137) $ 3,758 $ 12,405
Semiconductor Assembly 922 398 1,942 3,878
Advanced Materials 12,787 10,374 31,932 41,520
------- ------- ------- -------
$ 16,715 $ 7,635 $ 37,632 $ 57,803
======= ======= ======= =======
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