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CHEMDESIGN'S RECOVERY CONTINUES THROUGH FIRST QUARTER OF 1993

 FITCHBURG, Mass., April 19 /PRNewswire/ -- ChemDesign Corporation (NASDAQ: CDCC) today announced sales for the first quarter ended March 31, 1993 of $11.3 million, up slightly from the $11.1 million reported for the first quarter of 1992. Gross margin for the first quarter of 1993 of $3.1 million was up significantly from the $2.1 million reported for the same period in 1992. The gross margin rate increased to 27.2 percent from the 19.0 percent reported for the first quarter of 1992. Net earnings for the first quarter of 1993 of $582,000 or 7 cents per share, were also up significantly from the $32,000, or breakeven on a per share basis, reported for the comparable 1992 quarter.
 Richard E. T. Brooks, chairman and chief executive office of ChemDesign, commented: "I am pleased to report that the debugging of the new manufacturing plant in Fitchburg proceeded as expected, with only limited delays due to some faulty equipment; major, unanticipated problems did not occur. More significantly, the start-up of the baseload product for that plant is proceeding well. We anticipate rapid scale-up of production during the second quarter. This high volume Ag product, under contract, is currently scheduled to utilize approximately half of the capacity in the new Fitchburg plant during 1993 and 1994. Additional products have been identified for start-up in this plant during 1993 which will enhance further the utilization rate of this new capacity."
 Dr. Robert N. Eby, group vice president of operations, advised: "Our existing capacity was increasingly busy in the first quarter. the plants at SpecialtyChem Products Corporation, our Wisconsin subsidiary, were particularly busy and efficient, thus contributing to an increased gross margin rate for the quarter. On the other hand, start-up problems on another large volume, custom Ag intermediate, which commenced production in an existing facility in October 1992, continued through most of the first quarter. These problems, which adversely affected results for both the fourth quarter of 1992 and the first quarter of 1993, have now been substantially resolved, and we anticipate that the product will make its expected contribution for the balance of 1993 and into 1994."
 Michael J. O'Donnell, vice president and chief financial officer, added: "Net interest expense declined in the quarter to $144,000 from the $245,000 reported for the first quarter of 1992, not withstanding our increased level of borrowing in the first quarter of 1993. In addition to the interest expense reported for the first quarter of 1993, $309,000 of interest expense allocable to the construction of the new plant in Fitchburg was capitalized. With this plant now in production for the second quarter of 1993, we anticipate that interest expense will increase significantly as the capitalization of interest


costs in connection with construction of that plant ceases."
 Brooks concluded: "Thankfully, we have managed to avoid many of the start-up and debugging problems that could have substantially dampened our continued recovery during the early part of 1993. With these hurdles now behind us, our focus must be on filling all existing capacity. We are now seeing attractive new opportunities in both the custom and proprietary areas and are encouraged by the signs of a slow but continuing general economic recovery. We now remain confident t the earnings recovery we experienced in late 1992 will continue during 1993."
 ChemDesign is engaged primarily in the development, manufacture and sale of fine chemicals on a custom basis. As a custom fine chemical producer, ChemDesign provides manufacturing services to its customers and produces a wide variety of products, each manufactured to the customer's specifications. ChemDesign also manufactures and sells other fine and specialty chemicals on a proprietary (non-custom) basis and is committed to increasing its emphasis on sales of these chemicals.
 CHEMDESIGN CORPORATION
 First Quarter Ended March 31
 1993 1992
 Sales $11,300,000 $11,123,000
 Net income 582,000 32,000
 Earnings (loss)
 per share 7 cents ---
 Average Shares 8,827,000 8,838,000
 -0- 4/19/93
 /CONTACT: Michael J. O'Donnell, vice president and chief financial officer, or Steven E. Borgeson, senior vice president and general counsel, 508-345-9999/
 (CDCC)


CO: ChemDesign Corporation ST: Massachusetts IN: SU:

TM -- NE009 -- 7565 04/19/93 16:01 EDT
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Publication:PR Newswire
Date:Apr 19, 1993
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