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KOMAG REPORTS ITS FOURTH QUARTER AND AUDITED FINANCIAL RESULTS FOR THE 1992 FISCAL YEAR

 MILPITAS, Calif., Feb. 17 /PRNewswire/ -- Komag Inc. (NASDAQ: KMAG), a leading supplier of thin-film media and thin-film recording heads for high-performance Winchester disk drives, today announced financial results for the fourth quarter and audited financial results for the 1992 fiscal year ended Jan. 3, 1993.
 For the fourth quarter net sales totaled a record $96.3 million, a 33-percent increase relative to the $72.3 million for the comparable quarter of 1991. Net sales for the company's disk and recording head products in the recently completed fourth quarter totaled $85.1 million and $11.2 million, respectively. Net sales in the fourth quarter of 1992 were 16 percent higher than the $82.9 million recorded in the third quarter of 1992.
 Net income for the fourth quarter of 1992 was $4.4 million or 20 cents per share. In comparison, net income for the fourth quarter of 1991 was $0.9 million, or 4 cents per share. The results of the fourth quarter of 1991 included non-recurring costs of $2.1 million related to the Dastek merger. In comparison, on a consolidated basis, net income in the third quarter of 1992 was $6.1 million, or 29 cents per share.
 Net sales for the 1992 fiscal year totaled a record $326.8 million, including $279.5 million in thin-film media and $47.3 million in thin- film head revenue. This compares with sales of $279.2 million a year ago, including $228.2 million in thin-film media and $51.0 million in thin-film head revenue. Net income for the 1992 fiscal year totaled $16.9 million, or 79 cents per share, based on 21.4 million shares. Net income in fiscal 1991 was $15.4 million, or 75 cents per share, based on 20.5 million shares.
 In the fourth quarter Komag adopted, effective the beginning of fiscal 1992, the Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" (FAS 109) and restated the financial results for prior years as well as the first three quarters of 1992. Net income for all restated periods did not change from previously reported results. The restatement, in effect, reclassified previously reported extraordinary credits arising from the utilization of net operating loss carryforwards to the provisions for income taxes for the restated periods.
 "During the fourth quarter, our disk manufacturing operations in the United States and Japan capitalized on exceptionally strong customer demand and operated near-peak efficiencies. Our product mix in the United States continued to shift toward smaller-diameter and higher-capacity disks, favorably affecting financial performance. Pre-tax income for the media operations at Komag and Asahi Komag Co. Ltd. grew 21 percent and 25 percent between the third and fourth quarters, respectively," said Stephen C. Johnson, Komag's president and chief executive officer.
 "We previously announced that delays in releasing new thin-film head designs from engineering, coupled with low yields in manufacturing, would result in lower revenue and a larger fourth quarter loss at Dastek relative to the third quarter of 1992," said Johnson. The net loss at Dastek, the company's thin-film head joint venture with Asahi Glass America Inc., increased from $7.1 million to $10.2 million between the third and fourth quarters of 1992. The fourth quarter loss included $1.7 million in equipment write-offs due to technological obsolescence. Upon consolidation into Komag's financial statements, Dastek's net loss was reduced by recognition of Asahi's 40-percent minority interest.
 Since the actual fourth quarter loss at Dastek substantially exceeded the estimated fourth quarter loss included in the computation of the annual effective income tax rate at the end of the third quarter, a revision in the effective income tax rate for 1992 was required. The actual effective income tax rate for the year was revised to 81 percent, up from 63 percent recorded at the end of the third quarter. The sizable tax provision for the fourth quarter included an adjustment to record income taxes at the higher actual rate for the first three quarters of 1992. Losses at Dastek currently adversely affect the company's annual effective tax rate since such losses may only be offset against Dastek's future taxable income for federal tax purposes.
 Founded in 1983, Komag is the only independent volume supplier of thin-film disks and thin-film recording heads -- two critical components used in high-performance Winchester disk drives. Winchester disk drives are widely used in a broad range of computer applications from mainframes to portable computers.
 Komag and its consolidated subsidiaries maintain 670,000 square feet of manufacturing and administrative space in California and Malaysia, and employ approximately 3,100 people. The company also manufactures and sells thin-film disk products through an unconsolidated joint venture, Asahi Komag Co. Ltd., which is among the top three media producers in Japan.
 KOMAG INC.
 Consolidated Income Statements
 (In thousands, except per share data)
 (Unaudited)
 Three Months Ended 12 Months Ended(A)
 1/3/93 12/29/91 1/3/93 12/29/91
 Net Sales $96,274 $72,347 $326,801 $279,194
 Cost of Sales 76,713 56,322 259,036 211,009
 Gross Profit 19,561 16,025 67,765 68,185
 Research & Development
 Expense 7,699 5,462 26,366 18,028
 Selling, General
 & Administrative 6,063 4,702 21,967 20,571
 Merger Costs --- 2,111 --- 2,111
 Operating Profit 5,799 3,750 19,432 27,475
 Other Income 1,057 183 3,206 1,132
 Income Before Income Taxes,
 Minority Interest and
 Equity Income 6,856 3,933 22,638 28,607
 Provision for Income
 Taxes 8,646 3,255 18,375 14,293
 Minority Interests in Net
 Income (Loss) of Consolidated
 Subsidiaries (3,964) 298 (9,458) 1,025
 Equity in Net Income of
 Unconsolidated Joint
 Venture 2,204 520 3,172 2,070
 Net Income $ 4,378 $ 900 $ 16,893 $ 15,359
 Net Income Per Share $ 0.20 $ 0.04 $ 0.79 $ 0.75
 Shares Used in Calculating
 Per Share Amount 21,680 21,015 21,412 20,463
 KOMAG INC.
 Consolidated Balance Sheets (in thousands)
 Jan. 3, 1993(A) Dec. 29, 1991(A)
 ASSETS
 Cash and Short-Term Investments $ 89,343 $ 91,014
 Net Accounts Receivable Trade 33,301 27,779
 Inventories 20,197 21,991
 Deposits and Other Current Assets 10,589 8,676
 Total Current Assets 153,430 149,460
 Investment in Unconsolidated
 Joint Venture 8,371 4,665
 Net Property, Plant & Equipment 192,051 120,904
 Deposits and Other Assets 1,997 1,950
 TOTAL ASSETS $355,849 $276,979
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Accounts Payable Trade $ 27,615 $ 25,190
 Accrued Liabilities 19,155 16,060
 Long-term Obligations -- Current
 Portion 8,766 10,402
 Total Current Liabilities 55,536 51,652
 Long-term Obligations 27,613 16,516
 Other Liabilities 7,379 4,565
 Minority Interests in Consolidated
 Subsidiaries 16,583 2,169
 Common Stock and Additional
 Paid-In Capital 219,597 179,316
 Note Receivable from Stockholder (11,031) ---
 Retained Earnings 38,169 21,276
 Accumulated Translation Adjustment 2,003 1,485
 TOTAL STOCKHOLDERS' EQUITY 248,738 202,077
 TOTAL LIABILITIES & STOCKHOLDERS'
 EQUITY $355,849 $276,979
 (A) The Consolidated Balance Sheets and the Consolidated Income Statements for the years ended Jan. 3, 1993, and Dec. 29, 1991, have been derived from the Audited Financial Statements.
 -0- 2/17/93
 /CONTACT: David H. Allen, T. Hunt Payne, or William L. Potts Jr., of Komag, 408-946-2300/
 (KMAG)


CO: Komag Inc. ST: California IN: CPR SU: ERN

TM-GT -- SJ006 -- 7484 02/17/93 16:06 EST
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