EX-99.1 2 v036657_ex99-1.htm
EXHIBIT 99.1


Jerrold J. Pellizzon
Chief Financial Officer
(714) 549-0421 x262
jpellizzon@ceradyne.com
Dan Matsui/Gene Heller
Silverman Heller Associates
(310) 208-2550
 

CERADYNE, INC. REPORTS 2005 FOURTH QUARTER AND 12-MONTH RESULTS
Sales, Earnings, New Orders, and Backlog Reach Record Levels for Quarter, Year

Costa Mesa, CA (February 28, 2006)-Ceradyne, Inc. (Nasdaq: CRDN) (Company) today reported results for the fourth quarter and twelve months ended December 31, 2005.

Sales for the fourth quarter 2005 increased 36.9% to a record $114.2 million from $83.4 million in the fourth quarter of 2004. Net income for the fourth quarter 2005 increased 82.7% to a record $16.1 million, or $.63 per diluted share, compared to net income of $8.8 million, or $.35 per diluted share, in the fourth quarter of 2004. Fourth quarter 2005 net income included a non-recurring, non-cash after tax expense of $1.7 million, or $.07 per diluted share related to the write off of unamortized loan fees resulting from the repayment in full of the Company’s 2004 credit facility which was replaced with a fixed rate convertible bond issued in December 2005. Fully diluted average shares outstanding for the fourth quarter were 25,479,000 compared to 24,823,000 in the same period in 2004.
 
Gross profit margin increased to 36.7% of net sales in the fourth quarter of 2005 from 31.3% of net sales in the fourth quarter of 2004.

The provision for income taxes was 34.6% in the fourth quarter 2005, compared to 34.4% in the fourth quarter 2004.

Sales for the year ended December 31, 2005, increased to a record $368.3 million, up 70.8% from $215.6 million in 2004. For the year ended December 31, 2005, net income increased to $46.8 million, or $1.86 per diluted share, on 25,107,000 average shares outstanding, from $27.6 million, or $1.12 per diluted share, on 24,598,000 average shares outstanding, for the year ended December 31, 2004. Net income for the year ended December 31, 2005 was up 69.7% over last year, and earnings per diluted share for 2005 increased 66.1% compared to 2004.

Fourth quarter 2005 new orders were $200.9 million compared to $145.1 million in fourth quarter 2004. For the year 2005, new orders were $443.6 million compared to $276.0 million in 2004. Total order backlog on December 31, 2005 was $276.4 million compared to the prior year backlog of $199.9 million.


-more-
 

Joel P. Moskowitz, Ceradyne chief executive officer, commented: “In addition to the record fourth quarter 2005 operating performance reported above, in December 2005 Ceradyne successfully issued 2,070,000 shares of its common stock and $121,000,000 of a 2 7/8 percent fixed rate convertible bond. After underwriting fees and expenses relating to these concurrent offerings, the Company netted approximately $84.7 million related to the equity portion and $116.8 million related to the convertible bond. We used approximately $118.7 million to retire the floating rate debt we had raised in 2004 related to our acquisition of ESK Ceramics, with the balance of approximately $82.8 million intended for working capital, capital expenditures, other general corporate purposes, and possibly for acquisitions.”

Ceradyne’s management will review the financial results for the quarter and the year ended December 31, 2005 and provide an outlook on Ceradyne’s business including providing updated 2006 guidance in a conference call at 8:00 a.m. PST today. Interested parties may listen to the teleconference live via the Internet at www.ceradyne.com or www.Fulldisclosure.com. These web sites will also host an archive of the teleconference. A telephone playback will be available beginning 11:30 a.m. PST today through midnight on March 2, 2006. The playback can be accessed by calling 800-642-1687 (or 706-645-9291 for international callers) and providing Conference ID 4684018.

Ceradyne develops, manufactures and markets advanced technical ceramic products and components for defense, industrial, automotive/diesel and commercial applications. Additional information about the Company can be found at www.ceradyne.com.

Except for the historical information contained herein, this news release contains forward-looking statements regarding future events and the future performance of Ceradyne that involve risks and uncertainties that could cause actual results to differ materially from those projected. Words such as “anticipates,” “believes,” “plans,” “expects,” “intends,” “future,” and similar expressions are intended to identify forward-looking statements. These risks and uncertainties are described in the Company’s supplemental prospectuses, dated December 13, 2005, as filed with the Securities and Exchange Commission.
 

 
(Financial tables next page)
 
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Below is a summary of unaudited comparative results. Amounts in thousands except per share data.
  
   
   
Three Months Ended
  
Year Ended
  
   
December 31
  
December 31
  
   
2005
  
2004
  
2005
  
2004
  
                   
NET SALES
  
$
114,153
  
$
83,372
  
$
368,253
  
$
215,612
  
Cost of product sales
    
72,290
    
57,280
    
237,115
    
146,518
  
GROSS PROFIT
    
41,863
    
26,092
    
131,138
    
69,094
  
                           
Operating expenses:
                          
Selling
    
5,385
    
4,694
    
20,694
    
8,266
  
General and Administrative
    
5,835
    
5,103
    
21,014
    
14,131
  
Research and Development
    
2,163
    
1,460
    
7,802
    
3,341
  
     
13,383
    
11,257
    
49,510
    
25,738
  
                           
INCOME FROM OPERATIONS
    
28,480
    
14,835
    
81,628
    
43,356
  
Other income (expense):
                          
Other income
    
326
    
(167
)
  
854
    
2,224
  
Interest (expense)
    
(4,265
)
  
(1,279
)
  
(9,252
)
  
(1,661
)
     
(3,939
)
  
(1,446
)
  
(8,398
)
  
563
  
                           
INCOME BEFORE PROVISION
                          
FOR INCOME TAXES
    
24,541
    
13,389
    
73,230
    
43,919
  
Provision for income taxes
    
8,487
    
4,604
    
26,452
    
16,346
  
NET INCOME
  
$
16,054
  
$
8,785
  
$
46,778
  
$
27,573
  
                           
Earnings per share, basic
  
$
0.64
  
$
0.36
  
$
1.90
  
$
1.14
  
Earnings per share, diluted
  
$
0.63
  
$
0.35
  
$
1.86
  
$
1.12
  
                           
Avg. shares outstanding, basic
    
24,944
    
24,395
    
24,635
    
24,170
  
Avg. shares outstanding, diluted
    
25,479
    
24,823
    
25,107
    
24,598
  
                           
 
 
 
 
Condensed Consolidated Balance Sheets (in thousands):
      
           
   
December 31, 2005
  
December 31, 2004
  
           
Cash and Cash Equivalents
  
$
91,542
  
$
4,521
  
Short Term Investments
    
7,839
    
10,041
  
Other Current Assets
    
155,080
    
120,085
  
Net Property, Plant and Equipment
    
153,259
    
162,278
  
Other Assets
    
21,717
    
19,429
  
Total Assets
  
$
429,437
  
$
316,354
  
               
Current Liabilities
  
$
40,739
  
$
56,258
  
Long Term Debt
    
121,000
    
108,625
  
Non Current Liabilities
    
11,229
    
10,735
  
Deferred Tax Liability
    
6,075
    
5,695
  
Stockholders’ Equity
    
250,394
    
135,041
  
 
              
Total Liabilities and
Stockholders Equity
  
$
429,437
  
$
316,354
  
 
 
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