-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P+9fM4Rt0uwS/wvq2eymY8SyaxFtP5k2WTBC8AWobpA+wEZyP/tQYTqrOiLUhRhI slEzjSxPw5kZ9h7CqwRycg== /in/edgar/work/0000024741-00-000055/0000024741-00-000055.txt : 20001024 0000024741-00-000055.hdr.sgml : 20001024 ACCESSION NUMBER: 0000024741-00-000055 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000930 ITEM INFORMATION: FILED AS OF DATE: 20001023 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORNING INC /NY CENTRAL INDEX KEY: 0000024741 STANDARD INDUSTRIAL CLASSIFICATION: [3661 ] IRS NUMBER: 160393470 STATE OF INCORPORATION: NY FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-03247 FILM NUMBER: 743860 BUSINESS ADDRESS: STREET 1: ONE RIVERFRONT PLAZA CITY: CORNING STATE: NY ZIP: 14831 BUSINESS PHONE: 6079749000 MAIL ADDRESS: STREET 1: ONE RIVERFRONT PLAZA CITY: CORNING STATE: NY ZIP: 14831 FORMER COMPANY: FORMER CONFORMED NAME: CORNING INC /NY / CORNING LAB SERVICES INC DATE OF NAME CHANGE: 19930713 FORMER COMPANY: FORMER CONFORMED NAME: CORNING GLASS WORKS DATE OF NAME CHANGE: 19890512 8-K 1 0001.txt CORNING'S QUARTER 3, 2000 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: (Date of earliest event reported) October 23, 2000 CORNING INCORPORATED (Exact name of registrant as specified in its charter) New York 1-3247 16-0393470 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) One Riverfront Plaza, Corning, New York 14831 (Address of principal executive offices) (Zip Code) (607) 974-9000 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report) Item 5. Other Events. Item 7. Financial Statements. Exhibits: The Registrant's press release of October 23, 2000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CORNING INCORPORATED Registrant Date: October 23, 2000 By /s/ KATHERINE A. ASBECK Katherine A. Asbeck Vice President and Controller FOR RELEASE - October 23, 2000 Corning Contacts: Media Relations Investor Relations Daniel F. Collins Katherine M. Dietz (607) 974-4197 (607) 974-8217 collinsdf@corning.com dietzkm@corning.com Corning Pro Forma Earnings Per Share Up 84% in Third Quarter Optical Fiber, Cable and Amplifiers lead the way CORNING, N.Y. Corning Incorporated (NYSE:GLW), a leading manufacturer of optical-networking technologies, reported today that its third- quarter pro forma earnings per share were $0.35, an increase of 84% compared with $0.19 per share in the third quarter of 1999. Pro forma net income in the third quarter of 2000 totaled $317 million, more than double the $148 million in the third quarter of 1999. This performance was driven by strong demand for the company's high-data- rate optical fiber and cable, optical amplifiers, and LCD flat-panel display glass. "As the quarter's performance clearly shows, we continue to benefit from delivering powerful optical technologies that provide the capacity to double Internet traffic every six months," said Roger G. Ackerman, Corning's chairman and chief executive officer. "We met exceptionally robust demand for our optical-networking technologies by sourcing products from our expanded network of five optical fiber plants and nine photonic technology plants on four continents." Third-quarter sales were $1.9 billion, an increase of 54% over 1999 third-quarter sales of $1.25 billion. Excluding the impact of acquisitions, sales increased 37%. Sales in the optical fiber and cable business increased 67% versus the third quarter of last year, and 45% excluding the impact of acquisitions. Sales of photonic technologies grew 113%, led by demand for the company's optical amplifiers. Equity earnings were up 63% in the quarter due primarily to strong results by Samsung Corning Precision Glass Company, Ltd., a Korean manufacturer of flat-panel LCD display glass, and Samsung-Corning Company Ltd., a Korean manufacturer of glass for conventional TV and computer monitors. (more) Corning Reports Q3 Earnings Page 2 Pro forma net income excludes amortization of purchased intangibles and goodwill, purchased in-process research and development, one-time acquisition costs, discontinued operations and other non-recurring items. Including these items, Corning's net income for the third quarter of 2000 totaled $254 million, or $0.28 per share. This compares with third-quarter 1999 net income of $142 million, or $0.18 per share. Outlook As announced on October 11, the company expects full-year pro forma earnings per share in the range of $1.15 to $1.17, an increase of approximately 70% versus last year's $0.67. "Looking forward to 2001," Ackerman said, "we believe our key growth businesses will lead the way for strong revenue and earnings growth throughout 2001. Consistent with our long-term growth objectives, we expect earnings to grow next year at a rate of about 25%. As previously announced, the dilution from our pending acquisition of Pirelli's optical-components business will impact this growth rate by somewhat less than 5%, resulting in expected 2001 pro forma earnings per share in the range of $1.40 - $1.43." The company will host a conference call at 8:30 a.m. EDT on Monday, October 23, 2000. To access the call, dial 888-625-1617 or 415-228- 4589 and use password: earnings. A replay of the call will begin approximately 30 minutes after the call is completed and will run through 5:00 p.m. EDT on Friday, October 27, 2000. To access the replay, dial 800-677-5886 or 402-998-1184; a password is not required. To listen to a live audio webcast of the call, go to http://www.corning.com/investor and follow the instructions. The webcast will be archived on the www.corning.com site for 30 days following the call. Established in 1851, Corning Incorporated (www.corning.com) creates leading-edge technologies for the fastest-growing markets of the world's economy. Corning manufactures optical fiber, cable and photonic products for the telecommunications industry; and high- performance displays and components for television and other communications-related industries. The company also uses advanced materials to manufacture products for scientific, semiconductor and environmental markets. Corning's revenues in 1999 were $4.7 billion. ### Forward-Looking and Cautionary Statements Except for historical information and discussions contained herein, statements included in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause results to differ materially, as discussed in the company's filings with the Securities and Exchange Commission. Corning Incorporated and Subsidiary Companies Pro Forma Consolidated Statements of Income Excluding Amortization of Purchased Intangibles and Goodwill, Purchased In-Process Research and Development, Acquisition-Related Costs and Non-Recurring Items (In millions, except per share amounts)
Nine Months Three Months Ended Sept. 30, Ended Sept. 30, ------------------ ------------------ 2000 1999 2000 1999 -------- -------- -------- -------- Revenues Net sales $5,042.8 $3,372.0 $1,915.8 $1,245.3 Royalty, interest, and dividend income 78.6 30.0 28.2 8.7 -------- -------- -------- -------- 5,121.4 3,402.0 1,944.0 1,254.0 Deductions Cost of sales 2,930.4 2,074.2 1,112.7 767.0 Selling, general and administrative expenses 713.6 475.4 255.8 172.0 Research, development and engineering expenses 371.3 272.1 141.1 100.2 Interest expense 77.9 66.1 25.2 26.0 Other, net 39.7 32.5 7.0 11.9 -------- -------- -------- -------- Income before taxes 988.5 481.7 402.2 176.9 Taxes on income 320.2 144.4 130.2 51.8 -------- -------- -------- -------- Income before minority interest and equity earnings 668.3 337.3 272.0 125.1 Minority interest in earnings of subsidiaries (17.4) (36.6) (7.3) (9.1) Dividends on convertible preferred securities of subsidiary (2.3) Equity in earnings of associated companies 125.5 84.1 52.3 32.1 -------- -------- -------- -------- Pro Forma Net Income $ 776.4 $ 382.5 $ 317.0 $ 148.1 ======== ======== ======== ======== Pro Forma Basic Earnings Per Share $ 0.92 $ 0.50 $ 0.36 $ 0.19 ======== ======== ======== ======== Pro Forma Diluted Earnings Per Share $ 0.89 $ 0.49 $ 0.35 $ 0.19 ======== ======== ======== ======== Dividends Declared $ 0.18 $ 0.18 $ 0.06 $ 0.06 ======== ======== ======== ======== Shares used in computing pro forma earnings per share Pro forma basic earnings per share 844.2 763.2 876.6 772.8 ======== ======== ======== ======== Pro forma diluted earnings per share 873.0 793.8 906.6 796.8 ======== ======== ======== ========
The above pro forma amounts for the nine months ended September 30, 2000 have been adjusted to eliminate $144.2 million ($144.8 million after tax) of amortization of purchased intangibles and goodwill, $92.7 million ($76.4 million after tax) of in-process research and development charges, $47 million ($43.4 million after tax) of transaction costs from the Oak acquisition, $36.3 million after tax for the impairment of the entire equity investment in Pittsburgh Corning Corporation, and $6.8 million ($4.2 million after tax) for a nonoperating gain related to the sale of Quanterra Incorporated. The above pro forma amounts for the quarter ended September 30, 2000 have been adjusted to eliminate $81.9 million ($63.4 million after tax) of amortization of purchased intangibles and goodwill. The above pro forma amounts for the nine months ended September 30, 1999 have been adjusted to eliminate $21.2 million ($16.6 million after tax) of amortization of purchased intangibles and goodwill, $30.0 million ($9.5 million after tax and minority interest) of nonoperating gain related to the sale of Republic Wire and Cable, and $15.5 million ($10.0 million after tax) for the impairment of assets related to management's decision to sell Quanterra Incorporated. The above pro forma amounts for the quarter ended September 30, 1999 have been adjusted to eliminate $7.3 million ($5.7 million after tax) of amortization of purchased intangibles and goodwill, $30.0 million ($9.5 million after tax and minority interest) of nonoperating gain related to the sale of Republic Wire and Cable, and $15.5 million ($10.0 million after tax) for the impairment of assets related to management's decision to sell Quanterra Incorporated. PRO FORMA Corning Incorporated and Subsidiary Companies Condensed Consolidated Statements of Income (Unaudited; in millions, except per share amounts)
Nine Months Three Months Ended Sept. 30, Ended Sept. 30, ------------------- ------------------- 2000 1999 2000 1999 ------ ------ ------ ------ Revenues Net sales $5,042.8 $3,372.0 $1,915.8 $1,245.3 Royalty, interest, and dividend income 78.6 30.0 28.2 8.7 Nonoperating gains 6.8 30.0 30.0 -------- -------- -------- -------- 5,128.2 3,432.0 1,944.0 1,284.0 Deductions Cost of sales 2,930.4 2,074.2 1,112.7 767.0 Selling, general and administrative expenses 713.6 475.4 255.8 172.0 Research, development and engineering expenses 371.3 272.1 141.1 100.2 Amortization of purchased intangibles including goodwill 144.2 21.2 81.9 7.3 Interest expense 77.9 66.1 25.2 26.0 Acquisition-related charges 139.7 Provision for impairment and restructuring 15.5 15.5 Other, net 39.7 32.5 7.0 11.9 -------- -------- -------- -------- Income before taxes 711.4 475.0 320.3 184.1 Taxes on income 303.5 145.3 111.7 55.7 -------- -------- -------- -------- Income before minority interest and equity earnings 407.9 329.7 208.6 128.4 Minority interest in earnings of subsidiaries (17.4) (46.1) (7.3) (18.6) Dividends on convertible preferred securities of subsidiary (2.3) Equity in earnings of associated companies 125.5 84.1 52.3 32.1 Impairment of equity investment (36.3) -------- -------- -------- -------- Net Income $ 479.7 $ 365.4 $ 253.6 $ 141.9 ======== ======== ======== ======== Basic Earnings Per Share $ 0.57 $ 0.48 $ 0.29 $ 0.18 ======== ======== ======== ======== Diluted Earnings Per Share $ 0.55 $ 0.47 $ 0.28 $ 0.18 ======== ======== ======== ======== Dividends Declared $ 0.18 $ 0.18 $ 0.06 $ 0.06 ======== ======== ======== ======== Shares used in computing earnings per share Basic earnings per share 844.2 763.2 876.6 772.8 ======== ======== ======== ======== Diluted earnings per share 873.0 793.8 906.6 796.8 ======== ======== ======== ========
The accompanying notes are an integral part of these statements. Corning Incorporated and Subsidiary Companies Condensed Consolidated Balance Sheets (Unaudited; in millions)
Sept. 30, Dec. 31, 2000 1999 --------- -------- Assets Current Assets Cash and short-term investments $ 1,237.5 $ 280.4 Accounts receivable, net 1,295.4 872.4 Inventories 943.2 602.2 Deferred taxes on income and other current assets 239.6 229.2 --------- -------- Total current assets 3,715.7 1,984.2 Investments 549.1 504.4 Plant and equipment, net 4,092.3 3,201.7 Goodwill and other intangible assets, net 3,582.1 506.7 Other assets 248.9 329.0 --------- -------- Total Assets $12,188.1 $6,526.0 ========= ======== Liabilities and Shareholders' Equity Current Liabilities Loans payable $ 111.4 $ 420.7 Accounts payable 506.8 418.0 Other accrued liabilities 850.9 715.3 --------- -------- Total current liabilities 1,469.1 1,554.0 Other liabilities 772.9 720.6 Loans payable beyond one year 1,946.3 1,490.4 Minority interest in subsidiary companies 138.7 284.8 Convertible preferred stock 8.9 13.5 Common shareholders' equity 7,852.2 2,462.7 --------- -------- Total Liabilities and Shareholders' Equity $12,188.1 $6,526.0 ========= ========
The accompanying notes are an integral part of these statements. Corning Incorporated and Subsidiary Companies Notes to Consolidated Financial Statements Quarter 3, 2000 (1) Information by Operating Segment Information about the performance of Corning's three operating segments for the third quarter and nine months of 2000 and 1999 is presented below. These amounts exclude revenues, expenses and equity earnings not specifically identifiable to segments. In the first quarter of 2000, Corning changed the performance measurement of its operating segments to a new metric - net income excluding amortization of purchased intangibles and goodwill, purchased in-process research and development costs, one-time acquisition costs and other non-recurring items. This measure is not in accordance with generally accepted accounting principles (GAAP) and may not be consistent with measures used by other companies. The segment results for 1999 have been restated to conform to the new measure. Corning prepared the financial results for its three operating segments on a basis that is consistent with the manner in which Corning management internally disaggregates financial information to assist in making internal operating decisions. Corning has allocated some common expenses among segments differently than it would for stand alone financial information prepared in accordance with GAAP.
Nine months ended Three months ended September 30, September 30, ------------------ ------------------ 2000 1999 2000 1999 -------- -------- -------- -------- Telecommunications Net sales $3,577.7 $2,089.2 $1,402.1 $ 803.4 Research, development and engineering expenses $ 264.3 $ 186.9 $ 103.0 $ 71.2 Interest expense $ 50.0 $ 42.5 $ 16.3 $ 17.3 Segment earnings before minority interest and equity earnings $ 476.5 $ 231.6 $ 194.3 $ 89.8 Minority interest in (earnings) losses of subsidiaries 3.0 (20.4) (7.4) Equity in earnings (losses) of associated companies (3.1) 11.4 0.1 4.8 -------- -------- -------- -------- Segment net income $ 476.4 $ 222.6 $ 194.4 $ 87.2 ======== ======== ======== ======== Advanced Materials Net sales $ 808.0 $ 774.5 $ 271.7 $ 257.7 Research, development and engineering expenses $ 88.9 $ 68.8 $ 31.6 $ 23.7 Interest expense $ 15.0 $ 15.2 $ 3.8 $ 6.0 Segment earnings before minority interest and equity earnings $ 74.5 $ 71.6 $ 28.7 $ 23.6 Minority interest in earnings of subsidiaries (0.1) Equity in earnings of associated companies 17.2 13.7 5.4 6.1 -------- -------- -------- -------- Segment net income $ 91.7 $ 85.3 $ 34.1 $ 29.6 ======== ======== ======== ======== Information Display Net sales $ 640.3 $ 490.4 $ 236.8 $ 178.7 Research, development and engineering expenses $ 18.1 $ 16.4 $ 6.5 $ 5.3 Interest expense $ 12.6 $ 8.0 $ 5.1 $ 2.7 Segment earnings before minority interest and equity earnings $ 88.0 $ 40.1 $ 35.6 $ 12.9 Minority interest in earnings of subsidiaries (20.4) (16.2) (7.3) (1.5) Equity in earnings of associated companies 107.1 52.9 45.0 18.3 -------- -------- -------- -------- Segment net income $ 174.7 $ 76.8 $ 73.3 $ 29.7 ======== ======== ======== ======== Total segments Net sales $5,026.0 $3,354.1 $1,910.6 $1,239.8 Research, development and engineering expenses $ 371.3 $ 272.1 $ 141.1 $ 100.2 Interest expense $ 77.6 $ 65.7 $ 25.2 $ 26.0 Segment earnings before minority interest and equity earnings $ 639.0 $ 343.3 $ 258.6 $ 126.3 Minority interest in earnings of subsidiaries (17.4) (36.6) (7.3) (9.0) Equity in earnings of associated companies 121.2 78.0 50.5 29.2 -------- -------- -------- -------- Segment net income $ 742.8 $ 384.7 $ 301.8 $ 146.5 ======== ======== ======== ========
A reconciliation of the totals reported for the operating segments to the applicable line items in the consolidated financial statements is as follows:
Nine months ended Three months ended September 30, September 30, ------------------ ------------------ 2000 1999 2000 1999 -------- -------- -------- -------- Revenues Total segment net sales $5,026.0 $3,354.1 $1,910.6 $1,239.8 Non-segment net sales (a) 16.8 17.9 5.2 5.5 Royalty, interest and dividend income 78.6 30.0 28.2 8.7 Nonoperating gain 6.8 30.0 30.0 -------- -------- -------- -------- Total revenues $5,128.2 $3,432.0 $1,944.0 $1,284.0 ======== ======== ======== ======== Net income Total segment income (b) $ 742.8 $ 384.7 $ 301.8 $ 146.5 Unallocated items: Non-segment loss and other (a) (4.7) (7.7) (1.1) (1.3) Nonoperating gain 6.8 30.0 30.0 Amortization of purchased intangibles and goodwill (c) (144.2) (21.2) (81.9) (7.3) Acquisition-related charges (139.7) Provision for impairment and restructuring (15.5) (15.5) Interest income (d) 53.5 19.3 Interest expense (0.3) (0.4) Income tax (e) (2.5) 1.2 13.7 (3.9) Equity in earnings of associated companies (a) 4.3 6.1 1.8 2.9 Impairment of equity investment (36.3) Minority interest in nonoperating gain (9.5) (9.5) Dividends on convertible preferred securities of subsidiary (2.3) -------- -------- -------- -------- Net income $ 479.7 $ 365.4 $ 253.6 $ 141.9 ======== ======== ======== ========
(a) Includes amounts derived from corporate investments. (b) Includes royalty, interest and dividend income. (c) Amortization of purchased intangibles and goodwill relates primarily to the Telecommunications segment. (d) Corporate interest income is not allocated to reportable segments. (e) Includes tax associated with unallocated items. (2) Recent Acquisitions Optical Technologies USA ------------------------ On September 26, 2000, Corning signed a definitive agreement with Pirelli S.p.A., to acquire its 90% interest in Optical Technologies USA, a manufacturer of lithium niobate modulators, pump lasers, certain specialty fibers and fiber gratings used in optical networks for approximately $3.4 billion in cash. In addition, a contingent payment of $180 million may also be paid upon the achievement of certain product milestones. The remaining 10% is owned by Cisco Systems Inc. Cisco Systems has tag-along rights to sell its stake to Corning for a period of thirty business days beginning on September 26, 2000. If Cisco Systems exercises their right to sell, the purchase price will increase to approximately $4 billion in total. The transaction is expected to close in the fourth quarter subject to the receipt of certain government approvals. Due to the minimal amount of net tangible assets acquired, the amount allocated to goodwill, patents, in-process research and development and other intangible assets will approximate the purchase price. Any in-process research and development will be charged to income in the period the transaction closes and patents, goodwill and other acquired intangibles will be amortized over lives ranging from five to seventeen years. To finance this transaction, on October 18, 2000, Corning announced a dual tranche offering of convertible debt and common stock under its existing $4.8 billion universal shelf registration statement. Corning will offer 30 million shares of newly issued common stock, as well as raise $1.2 billion in proceeds through an offering of zero coupon convertible debentures. The offering is expected to close in early November. (3) Depreciation and Amortization Depreciation and amortization charged to operations for the third quarters of 2000 and 1999 totaled $219.1 million and $98.4 million, respectively. Depreciation and amortization charged to operations for the first nine months of 2000 and 1999 totaled $521.1 million and $302.1 million, respectively. (4) Taxes on Income Corning's effective income tax rate for the third quarter and nine months of 2000 was 34.9% and 42.7%, an increase over 1999 rates of 30.3% and 30.6%, respectively. The increase in the quarter and nine months was primarily due to the large amounts of non deductible purchased intangibles and goodwill acquired in the second quarter along with non deductible purchased in-process research and development costs associated with acquisitions and other acquisition-related items. Excluding the impact of the amortization of purchased intangibles and goodwill, purchased in- process research and development costs, one-time acquisition costs and other non-recurring items, the effective income tax rate for the third quarter and nine months of 2000 was 32.4% and 32.4%, an increase over 1999 rates of 29.3% and 30.0%, respectively. (5) Shareholders' Equity On April 27, 2000, the shareholders of Corning approved an increase to the authorized number of shares of common stock from 500 million to 1.2 billion shares. In August 2000, Corning authorized a three-for-one stock split of its common stock, effected in the form of a stock dividend, which was distributed on October 3, 2000, to shareholders of record on September 5, 2000. All of the share and per share data in these financial statements and footnotes have been retroactively adjusted to reflect the stock split. -----END PRIVACY-ENHANCED MESSAGE-----