Kaydon Corporation Reports Diluted Earnings Per Share from Continuing Operations of $2.17, a 42.8 Percent Increase Compared to $1.52 in 2005; Record 2006 Sales from Continuing Operations of $404.0 Million, an Increase of 13.9 Percent over 2005.Operating Margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 24.4 Percent Increased 460 Basis Points versus Prior Year; An Increase in after Tax Income from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of 49.4 Percent ANN ARBOR Ann Arbor, city (1990 pop. 109,592), seat of Washtenaw co., S Mich., on the Huron River; inc. 1851. It is a research and educational center, with a large number of government and industrial research and development firms, many in high-technology fields such as , Mich. -- Kaydon Corporation (NYSE NYSE See: New York Stock Exchange :KDN KDN Korea Electric Power Data Network Co, Ltd KDN Kenya Data Networks Limited (Nairobi, Kenya) ) today announced financial results for the fourth quarter and full year ended December December: see month. 31, 2006. On a full-year basis, record sales from continuing operations of $404.0 million were up 13.9 percent, after tax income from continuing operations increased 49.4 percent and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of from continuing operations were up 42.8 percent, to $2.17, versus 2005. Fourth quarter sales from continuing operations increased 11.7 percent to a record $100.1 million. Fourth quarter operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. from continuing operations increased 22.9 percent to $24.0 million, equal to 24.0 percent of sales. Fourth quarter after tax income from continuing operations increased 22.6 percent, and diluted earnings per share of $.55 were up 19.6 percent, compared with the fourth quarter of last year. Highlights - Continuing Operations - Full Year 2006 compared with Full Year 2005 * Sales increased 13.9 percent, to a record $404.0 million, on strengthened demand across most key product lines. * Operating income equaled $98.7 million, or 24.4 percent of sales, an increase of 40.6 percent compared to $70.2 million, or 19.8 percent of sales, last year. * After tax income increased 49.4 percent to $69.5 million, or 17.2 percent of sales, compared to $46.5 million, or 13.1 percent of sales, last year. * Diluted earnings per share increased 42.8 percent to $2.17. * Net cash flow from operating activities for the year increased 118.0 percent, to $89.9 million, versus $41.2 million in 2005. * EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become increased 33.9 percent to $116.1 million, equal to 28.7 percent of sales, and covered interest expense by 12.2 times. * Cash and cash equivalents equaled $370.8 million at the end of 2006. Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. P. Campbell Campbell, city, United States Campbell, city (1990 pop. 36,048), Santa Clara co., W Calif., in the fertile Santa Clara valley; founded 1885, inc. 1952. , Kaydon's President and Chief Executive Officer commented, "Our financial and shareholder performance in 2006 demonstrated the strength of our proprietary product positions and disciplined strategic direction. We believe our strong order intake during the year, combined with increased current incoming Incoming is a 3-D shooter developed by Rage Software and published by Interplay. The PC version was released in late 1998, and the Dreamcast version, a launch title for the console, was released in 1998 in Japan and in 1999 in the rest of the world. order rates and customer product availability inquiries, lay the foundation for increased operating performance in the current year." In commenting further, Mr. Campbell said, "The positive results we experienced in 2006 reflect the success of our efforts to drive growth through new product development and application engineering, our continued success in providing performance critical products to meet demanding customer needs, and the operational excellence initiatives executed by the Kaydon Team." Additional Data on Fourth Quarter and Full Year 2006 Results Sales from continuing operations during the fourth quarter of 2006 equaled a record $100.1 million compared to $89.7 million during the fourth quarter of 2005, an 11.7 percent increase. The Company generated increased sales across most of its product lines, including specialty bearings, split roller bearings roller bearing One of the two types of rolling, or antifriction, bearings, the other being the ball bearing. Like a ball bearing, a roller bearing has two grooved tracks, but the balls are replaced by rollers. The rollers may be cylinders or shortened cones. , specialty ball products, velocity control products, sealing products, air and liquid filtration filtration: see sewerage; water supply. Filtration The separation of solid particles from a fluidsolids suspension of which they are a part by passage of most of the fluid through a septum or membrane that retains most of the solids products, and specialty metal alloys This is a list of alloys for which an article exists in Wikipedia (or is proposed but not yet written). They are grouped by base metal, in order of increasing atomic number. Within these headings they are in no particular order. . Sales of continuing operations for the full year 2006 were $404.0 million, an increase of 13.9 percent compared to $354.6 million during 2005. Gross profit from continuing operations equaled $41.4 million or 41.3 percent of sales during the fourth quarter of 2006 as compared to $37.2 million or 41.5 percent of sales during the fourth quarter of 2005. Gross profit from continuing operations equaled $167.4 million or 41.4 percent of sales during the full year 2006 as compared to $139.0 million or 39.2 percent of sales during the full year 2005. Selling, general, and administrative ("SG&A") expenses of continuing operations equaled $17.4 million, or 17.4 percent of sales, during the fourth quarter of 2006, as compared to $17.6 million, or 19.7 percent of sales, during the fourth quarter of 2005. SG&A expenses of continuing operations equaled $68.7 million, or 17.0 percent of sales, during the full year 2006 as compared to $68.9 million, or 19.4 percent of sales, during full year 2005. Operating income from continuing operations during the fourth quarter of 2006 was $24.0 million, or 24.0 percent of sales, compared to $19.5 million, or 21.8 percent of sales in 2005, an increase of 22.9 percent. Operating income from continuing operations during full year 2006 was $98.7 million, compared to $70.2 million in 2005, an increase of 40.6 percent. Interest income increased to $4.6 million during the fourth quarter of 2006, compared with $3.0 million during the fourth quarter of 2005. Interest income increased to $16.3 million during full year 2006, compared with $8.7 million during 2005. The effective tax rate for continuing operations for the fourth quarter of 2006 was 32.7 percent, which compares to an effective tax rate of 28.7 percent in 2005's fourth quarter. The effective tax rates in both periods were reduced primarily by deductions recognized for financial reporting purposes after examinations by taxing authorities, or after the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of applicable review periods. For the full year 2006, the effective tax rate for continuing operations was 34.0 percent compared to 32.9 percent in 2005. The Company expects the effective tax rate for 2007 to be approximately 36.0-36.5 percent. Income from continuing operations for the fourth quarter of 2006 was $17.7 million or $.55 per share on a 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. basis, based on 34.8 million common shares outstanding. During the fourth quarter of 2005 Kaydon generated income from continuing operations of $14.4 million or $.46 per share on a diluted basis, based on 34.7 million common shares outstanding. Income from continuing operations for the full year 2006 was $69.5 million or $2.17 per share on a diluted basis, based on 34.8 million common shares outstanding; full year 2005 income from continuing operations was $46.5 million or $1.52 per share on a diluted basis, based on 34.7 million common shares outstanding. Income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for the full year 2005 equaled $27.4 million, including the after tax gain of $25.4 million on the sale of the former Power and Data Transmission Products Group. Diluted earnings per share from discontinued operations for the full year 2005 were $.79, based on 34.7 million common shares outstanding. Including discontinued operations, net income for the full year 2005 was $73.9 million, equal to diluted earnings per share of $2.30. Order entry for continuing operations during the fourth quarter of 2006 equaled $96.7 million, bringing total order entry for 2006 to $405.3 million, which compares to $112.7 million in 2005's fourth quarter, and $398.3 million for fiscal 2005. In each of 2005 and 2006, a major customer in the wind energy industry placed large, single orders for a substantial amount of their specialty bearings requirements for the following year; these orders occurred in the fourth quarter of 2005 for delivery in 2006, and occurred in the second quarter of 2006 for delivery through 2007. This variability in orders affects quarterly year-over-year comparisons. Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. equaled $151.6 million at December 31, 2006, compared to backlog of $150.2 million at December 31, 2005. Net cash flow from operating activities of continuing operations during the fourth quarter 2006 increased to $34.5 million, or 34.5 percent of sales, compared to fourth quarter 2005 cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $10.1 million. During the fourth quarter 2006, the Company paid common stock dividends of $3.4 million and invested $10.9 million in net capital expenditures, $6.0 million of which related to the Company's two previously disclosed major growth initiatives to increase capacity to serve the rapidly growing wind energy, and medical and security equipment markets. Reflecting primarily increased income from continuing operations and our ongoing focus on working capital management, net cash flow from operating activities for full year 2006 totaled $89.9 million. Net cash flow from operating activities for full year 2005 totaled $41.2 million, after giving effect to a $16.6 million tax payment related to a divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). . During 2006, the Company repurchased a total of 96,355 shares of Company common stock for $3.4 million, paid common stock dividends of $13.5 million, and invested $26.3 million in net capital expenditures, including $11.7 million related to the two growth initiatives mentioned above. Primarily due to these growth initiatives, the Company currently expects to spend approximately $40 million on capital expenditures during 2007. Cash and cash equivalents equaled $370.8 million at December 31, 2006. Driven by higher net cash flow from operating activities, free cash flow, defined as net cash flow from operating activities less capital expenditures, equaled $23.6 million during the fourth quarter 2006, as compared to $4.4 million during the fourth quarter 2005. Free cash flow for the full year 2006 totaled $63.6 million, as compared to $28.7 million during 2005. Readers should refer to the attached Reconciliation of Non-GAAP Measures exhibit for the calculation of free cash flow and the reconciliation of free cash flow to the most comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measure. Depreciation and amortization of continuing operations equaled $4.4 million during the fourth quarter of 2006, compared to $4.2 million during the comparable period last year. Depreciation and amortization of continuing operations for 2006 equaled $17.4 million, compared to $16.5 million in 2005. EBITDA from continuing operations, or 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.
About Kaydon Kaydon Corporation is a leading designer and manufacturer of custom-engineered, performance-critical products, supplying a broad and diverse group of industrial, aerospace, medical and electronic equipment, and aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. customers. Conference call information: At 10:30 a.m. Eastern time today, Kaydon will host a fourth quarter and full year 2006 earnings conference call. The conference call can be accessed telephonically in a listen-only mode by dialing 1-866-564-7439 and providing the following passcode number: 800500. Participants are asked to dial in 10 minutes prior to the scheduled start time of the call. Alternatively, interested parties are invited to listen to the conference call on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at: http://www.vcall.com/IC/CEPage.asp?ID=113428 or by logging on to the Kaydon Corporation website at: http://www.kaydon.com and accessing the conference call at the "4Q and Full Year 2006 Earnings Conference Call" icon. To accommodate those that are unable to listen at the scheduled start time, a replay of the conference call will be available telephonically beginning at 1:30 p.m. Eastern time today through Wednesday Wednesday: see week. , February February: see month. 21, 2007 at 5:00 p.m. Eastern time. The replay is accessible by dialing 1-888-203-1112 and providing the following passcode number: 2812304. Additionally, interested parties can access an archive of the conference call on the Kaydon Corporation website at http://www.kaydon.com. 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 Securities Exchange Act of 1934 regarding the Company's plans, expectations, estimates and beliefs. Forward-looking statements are typically identified by words such as "believes," "anticipates," "estimates," "expects," "intends," "will," "may," "potential," "projects," "approximately," "looking forward to" and other similar expressions, including statements regarding pending litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , general economic conditions, competitive dynamics and the adequacy of capital resources. These forward-looking statements may include, among other things, projections of the Company's financial performance, anticipated growth, characterization A rather long and fancy word for analyzing a system or process and measuring its "characteristics." For example, a Web characterization would yield the number of current sites on the Web, types of sites, annual growth, etc. of and the Company's ability to control contingent liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. , and anticipated trends in the Company's businesses. These statements are only predictions, based on the Company's current expectation about future events. Although the Company believes the expectations reflected in the forward-looking statements are reasonable, it does not guarantee future results, performance or achievements or that predictions or current expectations will be accurate. These forward-looking statements involve risks and uncertainties that could cause the Company's actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. In addition, the Company or persons acting on its behalf may from time to time publish or communicate other items that could also be construed to be forward-looking statements. Statements of this sort are or will be based on the Company's estimates, assumptions, and projections and are subject to risks and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. Kaydon does not undertake any responsibility to update its forward-looking statements or risk factors to reflect future events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Certain non-GAAP performance measures are presented in this press release. These measures should be viewed as supplemental data, rather than as substitutes or alternatives to the most comparable GAAP performance measures. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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