Applied Films Reports Earnings for First Quarter Fiscal Year 2004
Wednesday October 22, 4:01 pm ET
LONGMONT, Colo., Oct. 22 /PRNewswire-FirstCall/ -- Applied Films Corporation (Nasdaq: AFCO - News) announced today results for the first quarter of fiscal 2004, ended September 27, 2003.
First Quarter Fiscal 2004 Results from Continuing Operations
Net revenues for the first quarter of fiscal 2004 were $47.7 million compared to $25.1 million for the first quarter of fiscal 2003, an increase of 90.0%.
Income from continuing operations on a GAAP basis for the first quarter of fiscal 2004 was $2.2 million or $0.19 per fully diluted common share, compared to a loss from continuing operations on a GAAP basis of $790,000 or $0.07 per fully diluted common share for the first quarter of fiscal 2003. Our GAAP EPS corresponds to First Call's definition of GPS.
Earnings before amortization of other intangible assets (EBIA), for the first quarter of fiscal 2004 was $2.9 million, or $0.25 per fully diluted common share, compared to a loss of $(124,000) or $(0.01) per fully diluted common share for the first quarter of fiscal 2003. Our EBIA EPS corresponds to First Call's definition of EPS.
The Company reports EBIA as a pro forma non-GAAP financial measure so that management and investors can assess the ongoing performance of the company without considering the non-cash charges for the amortization of intangibles related to the LAC Acquisition. The pre-tax charge for amortization of other intangible assets in the fiscal first quarter was $1.0 million. A reconciliation of pro-forma non-GAAP measurements to GAAP can be found in the attached financial table.
Bookings for the quarter were $41.8 million. Equipment backlog as of September 27, 2003 was $94.6 million, compared to $68.0 million at the end of the first fiscal quarter of 2003, an increase of 39.1%, and compared to $100.6 million at the end of the fourth fiscal quarter of 2003. The Company expects to recognize revenue from this backlog over the next 6 to 12 months.
"We are pleased with our financial performance and the continued strength in the markets that we are serving. The sale of our Hong Kong coated glass business completes our strategy to transition to 100% equipment revenues," stated Thomas T. Edman, President and CEO of Applied Films. "The successful follow-on offering allowed us to raise over $93 million in cash, which puts us in a strong position to pursue our future plans to provide superior equipment and process solutions to our markets."
On September 26, 2003, we sold our coated glass business located in Hong Kong, to Nippon Sheet Glass, Co., Ltd. The consolidated statement of operations for the current quarter and the first quarter of the prior fiscal year have been restated to reflect the effect of the sale and the results have been included in income (loss) from discontinued operations, net of taxes on the consolidated statement of operations. The balance sheet as of June 28, 2003 has been restated to reflect the reclassification of the assets and liabilities of the Hong Kong coated glass business to net assets associated with discontinued operations. On September 24, 2002, we sold our coated glass division located in Longmont, Colorado to Optera, Inc. (formerly known as Information Products Longmont, Inc.). The income statement for the first quarter of the prior fiscal year has been restated to reflect the effect of this sale, and the results have been included in income (loss) from discontinued operations, net of taxes on the consolidated statement of operations. The gain on sale for both of these businesses is included in gain on disposal of discontinued operations, net of tax, on the consolidated statement of operations. On September 15, 2003, Applied Films Corporation and Optera, Inc. entered into a Settlement Agreement related to a warranty claim for coated glass. The effect of the settlement is included in income (loss) from discontinued operations, net of taxes on the consolidated statement of operations.
Business Outlook
The following statements are based on our current expectations for the second quarter of fiscal 2004. These statements are forward-looking and subject to the qualifying safe harbor statement.
Fiscal 2004 - Second Quarter Guidance
* Net Revenues: We expect net revenues for the second quarter of fiscal
2004 to be between $51 - $53 million.
* GAAP Earnings Per Share: We expect GAAP earnings per share in the
range of approximately $0.17 - $0.21 per fully diluted share for the
second quarter of fiscal 2004.
* With the addition of the 3.45 million shares sold in our common stock
offering that closed in October, we expect fully diluted shares
outstanding to be approximately 15 million for the second quarter of
fiscal 2004.
* Amortization of Intangibles: We expect the amortization of
intangibles to be approximately $1.0 million for the second quarter of
fiscal 2004.
First Quarter Fiscal 2004 Conference Call
Applied Films Corporation will conduct a conference call and webcast at 3:30p.m. MDT (5:30p.m. ET) on Wednesday, October 22, 2003 to review first quarter fiscal year 2004 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 1-800-795-1259 or 1-785-832-0326 (International) at least 5-10 minutes prior to the start time (Conference ID: AFILMS) or via webcast at www.appliedfilms.com , and click on the "Investor Relations" button and then "Meetings and Presentations". A replay of the recorded conference call will be available until October 29, 2003. To listen to the replay, dial 1-800-839-4017.
Upcoming Events
Applied Films Corporation will be presenting at the AeA Classic Financial Conference on November 3-4, 2003 in San Diego, California; and the Lehman Brothers 2003 Semiconductor and Computer Systems Conference on November 18-20, 2003 in San Francisco, California.
About Applied Films Corporation
We are a leading provider of thin film deposition equipment to diverse markets such as the flat panel display, the architectural, automotive and solar glass, and the consumer products packaging and electronics industries. For more information, please visit our 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 future bookings, revenues and earnings, are not guaranties of future performance. 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, the effect of changing worldwide political and economic conditions on capital expenditures, the impact of SARS and the resulting limitation of travel to customers by company representatives, production levels, including those in Europe and Asia, the effect of overall market conditions and market acceptance risks. 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 Forms 10-K and Forms 10-Q.
- FINANCIAL TABLES FOLLOW -
APPLIED FILMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended
September 27, 2003(1) September 28, 2002(1)
Net revenues $47,674 $25,085
Cost of goods sold 34,660 18,439
Gross profit 13,014 6,646
Operating expenses:
Selling, general and
administrative 6,245 5,962
Research and development 4,068 2,262
Amortization of other
intangible assets 1,017 889
Income (loss) from operations 1,684 (2,467)
Other (expense) income, net:
Interest income (expense), net 229 693
Other income (expense), net 639 133
Equity earnings of joint venture 549 365
Income (loss) from continuing
operations before income taxes 3,101 (1,276)
Income tax benefit (expense) (921) 486
Income (loss) from
continuing operations 2,180 (790)
Discontinued operations(2):
Income (loss) from
discontinued operations,
net of tax (418) 16
Gain on disposal of
discontinued operations,
net of tax 770 429
Discontinued operations,
net of tax 352 445
Net income (loss) applicable
to common stockholders $2,532 $(345)
Earnings (loss) per share:
Basic:
Earnings (loss) from
continuing operations $0.19 $(0.07)
Income (loss) from
discontinued operations 0.03 0.04
Basic earnings (loss) per share $0.22 $(0.03)
Diluted:
Earnings (loss) from
continuing operations $0.19 $(0.07)
Income (loss) from
discontinued operations 0.03 0.04
Diluted earnings (loss)
per share $0.22 $(0.03)
Weighted average common
shares outstanding:
Basic 11,189 11,035
Diluted 11,493 11,035
(1) Amounts have been adjusted to show the operating results of the Hong
Kong Coated Glass Business, and the Longmont Coatings Division,
which were sold on September 26, 2003, and September 24, 2002,
respectively, as discontinued operations.
(2) Reflects the operations and the gain recognized from the sale of the
Hong Kong Coated Glass Business, and the Longmont Coatings Division
on September 26, 2003, and September 24, 2002, respectively, as
discontinued operations.
RECONCILIATION OF PRO-FORMA NON-GAAP MEASUREMENT TO GAAP
(in thousands, except per share data)
Three Months Ended
September 27, 2003(1) September 28, 2002(1)
Pro Forma Financial
Results (EBIA):
Earnings (Loss) Before
Intangible Amortization:
Income (loss) from
continuing operations
before income taxes $3,101 $(1,276)
Add: Amortization of
Other Intangible Assets 1,017 889
Earnings (Loss) from
Continuing Operations
Before Intangible
Amortization and Taxes 4,118 (387)
Tax Benefit (Provision) (2) (1,249) 263
Earnings (Loss) from
Continuing Operations
Before Intangible Amortization $2,869 $(124)
EBIA per share:
Basic EBIA Per Share $0.26 $(0.01)
Diluted EBIA Per Share $0.25 $(0.01)
Weighted Average Common
Shares Outstanding:
Basic 11,189 11,035
Diluted 11,493 11,035
(1) Amounts have been adjusted to show the operating results of the Hong
Kong Coated Glass Business and Longmont Coatings Division, which
were sold on September 26, 2003, and September 24, 2002,
respectively, as discontinued operations.
(2) Taxes are calculated at 35% and equity earnings of joint venture are
non-taxable.
Note: EBIA is not intended to represent cash flows for the period. EBIA
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with generally
accepted accounting principles. Our definition of EBIA may differ
from similar measurements provided by other public companies.
APPLIED FILMS CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
September 27, 2003(1) June 28, 2003(1)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $50,107 $41,881
Marketable securities 52,265 51,620
Accounts and trade notes
receivable, net of allowance
of $443 and $653, respectively 21,926 10,838
Revenue in excess of billings 25,284 37,728
Inventories, net 6,585 6,731
Prepaid expenses and other 1,997 2,488
Current assets associated with
discontinued operations 1,137(1) 1,344(1)
Total current assets 159,301 152,630
Property, plant and equipment,
net of accumulated depreciation
of $7,355 and $6,752, respectively 5,866 5,958
Goodwill and other intangible
assets, net of accumulated
amortization of $15,621 and $14,495
respectively 73,886 74,461
Investment in joint venture 12,365 11,889
Deferred tax asset, net 7,935 9,549
Other assets 253 255
Total assets $259,606 $254,742
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $24,628 $17,509
Accrued expenses 23,536 23,257
Billings in excess of revenue 10,228 16,773
Current portion of deferred gross
profit, deferred gain and lease
obligation 385 391
Deferred tax liability 5,407 5,407
Current liabilities associated with
discounted operations 413 536
Total current liabilities 64,597 63,873
Long-term portion of gross profit,
deferred gain and lease obligation 1,975 2,063
Accrued pension benefit obligation 11,979 11,608
Total liabilities 78,551 77,544
STOCKHOLDERS' EQUITY:
Preferred Stock, no par value,
1,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, no par value,
40,000,000 shares authorized,
11,235,128 and 11,161,873 shares
issued and outstanding at
September 27, 2003, and
June 28, 2003, respectively 161,655 160,685
Warrants and stock options 734 734
Other cumulative comprehensive
income (loss) 11,859 11,504
Retained earnings 6,807 4,275
Total stockholders' equity 181,055 177,198
Total liabilities and
stockholders' equity $259,606 $254,742
(1) As adjusted to reclassify the assets and liabilities of the Hong
Kong Coated Glass Business to net assets associated with
discontinued operations for sale of the Hong Kong Coated Glass
Business on September 26,2003.
Source: Applied Films Corporation |
