Applied Films Corporation Reports Continued Profitability For the Second Fiscal Quarter 2002
LONGMONT, Colo., Jan. 17 /PRNewswire-FirstCall/ -- Applied Films Corporation (Nasdaq: AFCO - news), a leading supplier of thin film deposition equipment to the flat panel display (FPD), architectural, automotive and solar glass, and the consumer products packaging and electronics industries, today reported its results for the second quarter of fiscal 2002, ended December 29, 2001. In addition to GAAP earnings and GAAP earnings per share, Applied Films has also included cash earnings and cash earnings per share, which are earnings excluding the effect of amortization of intangible assets related to the acquisition of the Large Area Coatings division of Unaxis (LAC). GAAP earnings include the effect of amortization of intangible assets.
Second Quarter Fiscal 2002 Results
Net revenues for the second quarter of fiscal 2002 were $39.2 million versus $10.3 million for the second quarter of fiscal 2001, representing an increase of 281%. In the second fiscal quarter, 93% of our revenue was derived from thin film deposition equipment compared to 35% for the second fiscal quarter of last year. Coated glass revenues were 59% lower in the second quarter of fiscal 2002 compared to the second fiscal quarter of 2001 due to continued weakness in the cellular phone market.
Cash earnings were ahead of analyst consensus estimates for the second quarter of fiscal 2002 at $1.3 million or $0.14 per fully diluted common share, compared to $1.5 million or $0.23 per fully diluted common share for the comparable period in the last fiscal year.
The net income on a GAAP basis for the second quarter of fiscal 2002 was $751,000, or $0.07 per fully diluted common share, compared to a net income of $1.5 million or $0.23 per fully diluted common share, for the second quarter of fiscal 2001. The net income reported under GAAP, for the second quarter of fiscal 2002, includes the after tax effect of $839,000 for amortization of intangibles related to the LAC acquisition.
Equipment backlog for Applied Films as of December 29, 2001 was $75.2 million, compared to $9.4 million at the end of the second quarter 2001 and $96.6 million at the end of the first quarter of fiscal 2002. We expect this backlog will be recognized over the next 6 to 12 months. We do not report a backlog figure for our coated glass business due to the just-in-time nature of the sales process.
Thomas Edman, President and Chief Executive Officer said, ``I am pleased to report another profitable quarter for Applied Films in the face of challenging economic times. While we experienced a delay in bookings as our customers postponed buying decisions until after the end of the calendar year, we are encouraged to see continued strong customer activity in our major equipment markets. When the upcoming investment cycle in flat panel display begins, we believe that we are well positioned to address this market demand with our strength in thin film technology.''
Business Outlook
Factory utilization rates in the TFT flat panel display market continued to rise in the last quarter due to an increasing unit volume penetration rate in the desktop monitor market. Several TFT manufacturers have also announced price increases for their 15`` and 17'' monitors which is an encouraging sign of tightening supply in that market. We believe that these indicators point to a renewed investment cycle in the TFT market during calendar 2002 which will lead to additional production capacity in 2003. As Plasma Display capacity has continued to increase, plasma displays have become more common in applications such as kiosks and other non-consumer display applications. We expect the next investment cycle in this market to begin in late 2002 to early 2003. Our coated glass business continues to face an environment of weakness created by dampened cellular phone demand.
Our web coater business for packaging, capacitor and touch panel markets registered strong performance during the quarter, while bookings in our low-E architectural and automotive glass coating equipment business weakened. These businesses have acted as a counterbalance to the weaker performance in the flat panel display market over the last nine months. We have continued to receive limited orders for our BESTPET(TM) equipment which is targeted at significantly enhancing the barrier properties of filled plastic (PET) bottles allowing plastic to replace glass for soda packaging in hotter climates and in smaller packages.
The following statements are based on our current expectations for the next two quarters of fiscal 2002. These statements are forward-looking and subject to the qualifying safe harbor statement. Actual results may differ materially:
Fiscal 2002 - For Each of The Third and Fourth Quarters - Revised Guidance
-- Net Revenues: We expect net revenue for each of the third and fourth
quarters of fiscal 2002 to be between $37-$41 million, with
approximately 95% of our revenues recognized from the equipment
segment of the business.
-- GAAP Earnings: We expect a GAAP earnings per share range of
approximately $0.01 - $0.07 per fully diluted share for each of the
third and fourth quarters of fiscal 2002.
-- Cash Earnings: We expect a Cash Earnings per share range of
approximately $0.09 - $0.16 per fully diluted share for each of the
third and fourth quarters of fiscal 2002.
Second Fiscal Quarter 2002 Conference Call
Applied Films Corporation will conduct a conference call and webcast at 9:00 a.m. MDT (11:00 a.m. EDT) on Thursday, January 17, 2002 to review second quarter fiscal year 2002 financial results. During the conference call and webcast, Thomas Edman, President and Chief Executive Officer, and Lawrence Firestone, Chief Financial Officer, will present the financial results for the quarter.
The public is invited to participate in the conference call by dialing 800-451-7724 or 785-830-1963 (International) at least 5-10 minutes prior to the start time. A replay of the recorded conference call will be available until January 31, 2002. To listen to the replay, dial 800-753-4601 or 402-220-2092.
About Applied Films Corporation
Applied Films Corporation a leading provider of thin film deposition equipment to the flat panel display, the architectural, automotive and solar glass, and the consumer products packaging and electronics industries. We have also developed a barrier coating solution technology for the plastic beverage bottle industry. Our deposition systems are used to deposit thin films that enhance the characteristics of a base substrate, such as glass, plastic, paper or foil. These thin films provide conductive, electronic, reflective, filter, barrier, and other properties that are critical elements of our customers' products. Founded in 1976, the Company currently has approximately 580 employees at its headquarters in Longmont, Colorado, and operations in Alzenau and Hanau Germany; Brussels, Belgium; Hong Kong and Shanghai, China; Seoul, Korea; Tokyo and Osaka, Japan; and Taipei, Taiwan. For more information, please visit Applied Films' web site at appliedfilms.com .
Safe Harbor Statement
This press release contains forward-looking statements that involve substantial risks and uncertainties. Typically, these statements contain words such as ``anticipate,'' ``believe,'' ``could,'' ``estimate,'' ``expect,'' ``intend,'' ``may,'' ``should,'' ``will'' and ``would'' or similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position or state other ``forward-looking'' information. You are cautioned that forward-looking statements, including statements about our intent, belief or current expectations regarding recognition of backlog, cell phone and TFT investment cycles and market conditions, plasma television investment cycles and market penetration, demand for flat panel displays, and future revenues and earnings, are not guaranties of future performance. Actual results may differ materially from such expectations. There may be events in the future that we are not able to predict or control. Such risks and uncertainties include change in the demand for coating equipment and coated glass, the effect of changing worldwide political and economic conditions (including those related to the September 11, 2001, terrorist attacks and related events) on capital expenditures and production levels, including those in Asia, the effect of overall market conditions and market acceptance risks. Our future results may also affected by our ability to successfully manage and integrate the recently acquired LAC business. Other risks include those associated with dependence on suppliers, the impact of competitive products and pricing, technological and product development risks and other risk factors. As a result, our operating results may fluctuate, especially when measured on a quarterly basis. The forward-looking statements included in this release are made only as of the date of this release and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances. For further information, refer to our Securities and Exchange Commission filings, including our Registration Statement on Form S-1, Form 10-K and Forms 10-Q.
APPLIED FILMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
Three months ended Six months ended
December 29, December 30, December 29,December 30,
2001 2000 2001 2000
Net Revenues $39,231 $10,309 $80,514 $27,179
Cost of Goods Sold 29,148 9,861 60,409 24,183
Gross Profit 10,083 448 20,105 2,996
Operating Expenses:
Selling, General and
Administrative 6,708 1,536 13,311 3,226
Research and
Development 1,978 485 4,057 898
Amortization of Other
Intangible Assets 839 -- 1,678 --
Income (Loss) From
Operations 558 (1,573) 1,059 (1,128)
Other (Expense) Income:
Interest Income (Expense) 36 666 (17) 1,201
Other Income (Expense) 286 230 595 339
Equity Earnings of Joint
Venture 153 1,647 263 2,932
Income Before Income
Taxes 1,033 970 1,900 3,344
Income Tax Benefit
(Provision) (282) 483 (593) 362
Net Income 751 1,453 1,307 3,706
Preferred Stock
Dividends (112) -- (315) --
Net Income Applicable to
Common Stockholders $639 $1,453 $992 $3,706
Net Income Per Share:
Basic $0.07 $0.24 $0.13 $0.61
Diluted $0.07 $0.23 $0.12 $0.59
Weighted Average Common
Shares Outstanding:
Basic 9,086 6,052 7,813 6,046
Diluted 9,353 6,267 8,070 6,274
Cash Earnings:
Operating Income (Loss)
Before Amortization
of Intangibles $1,397 $(1,573) $2,737 $(1,128)
Interest Income (Expense) 36 666 (17) 1,201
Other Income (Expense) 286 230 595 339
Equity In Earnings of
Joint Venture 153 1,647 263 2,932
Cash Earnings Before
Taxes 1,872 970 3,578 3,344
Taxes Benefit
(Provision) (601) 483 (1,160) 362
Cash Earnings $1,271 $1,453 $2,418 $3,706
Cash Earnings Per
Common Share
Basic $0.14 $0.24 $0.31 $0.61
Diluted $0.14 $0.23 $0.30 $0.59
Weighted Average Common
Shares Outstanding:
Basic 9,086 6,052 7,813 6,046
Diluted 9,353 6,267 8,070 6,274
APPLIED FILMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
(unaudited)
December 29, June 30,
2001 2001
ASSETS
Current Assets:
Cash and cash equivalents $87,688 $26,236
Accounts and trade notes receivable, net of
allowance of $887 and $1,142 12,299 12,267
Costs and profit in excess of billings 33,737 29,717
Inventories, net of allowance of $626 and $613 15,248 16,599
Prepaid expenses and other 1,104 836
Deferred tax asset, net 989 989
Total current assets 151,065 86,644
Property, plant and equipment, net of accumulated
depreciation of $10,475 and $9,998 7,802 7,746
Goodwill and other intangible assets, net of
accumulated amortization of $6,715 and $5,036 59,482 58,097
Investment in Joint Venture 9,938 9,852
Deferred tax asset, net 6,780 6,780
Other assets 333 307
Total Assets $235,400 $169,426
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $13,059 $13,063
Accrued expenses 40,037 39,841
Accrued pension benefit obligation 7,728 6,876
Billings in excess of revenue 8,217 8,716
Current portion of:
Deferred revenue 279 279
Deferred gain 56 56
Deferred tax liability 2,128 2,129
Total current liabilities 71,504 70,960
Long-term debt -- 6,483
Deferred revenue, net of current portion 2,049 2,202
Deferred gain, net of current portion 561 589
Total Liabilities 74,114 80,234
STOCKHOLDERS' EQUITY:
Series A Convertible Preferred Stock; no par value,
1,000,000 shares authorized; 0 and 1,000 shares
outstanding at December 29, 2001 and June 30, 2001,
respectively -- 8,571
Common Stock, no par value, 40,000,000 shares
authorized, 10,981,084 and 6,832,701 shares issued
and outstanding at December 29, 2001 and
June 30, 2001 159,272 83,207
Warrants and stock options 734 876
Other cumulative comprehensive income (loss) (3,270) (7,020)
Retained earnings 4,550 3,558
Total Stockholders' Equity 161,286 89,192
Total Liabilities & Stockholders' Equity $235,400 $169,426
SOURCE: Applied Films Corporation |
