Applied Films Corporation Reports Strong Bookings And First Fiscal Quarter 2003 Results
Thursday October 17, 7:05 am ET
LONGMONT, Colo., Oct. 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 first quarter of fiscal 2003, ended September 28, 2002.
During the first quarter of fiscal 2003, Applied Films Corporation sold its coated glass division located in Longmont, Colorado, to Information Products Longmont, Inc., a subsidiary of Information Products, Inc., a subsidiary of Magna Donnelly Corporation. The transaction closed on September 24, 2002. The income statement and balance sheet for the current quarter and the prior year have been restated to reflect the effect of the sale, and the results have been included in loss from discontinued operations, net of taxes on the income statement.
First Quarter Fiscal 2003 Results from Continuing Operations
Net revenues for the first quarter of fiscal 2003 were $26.9 million versus $39.3 million for the first quarter of fiscal 2002, representing a decrease of 32%. In the first fiscal quarter, 93% of our revenue was derived from sales of thin film deposition equipment compared to 94% for the first fiscal quarter of last year. The decrease in revenue from equipment sales resulted from the lower backlog of $41.1 million at the beginning of the first quarter of fiscal 2003 compared to $99.2 million at the beginning of the first quarter of fiscal 2002.
The net loss from continuing operations for the first quarter of fiscal 2003 was $(689,000), or $(0.06) per fully diluted common share, compared to income from continuing operations of $680,000 or $0.07 per fully diluted common share, for the first quarter of fiscal 2002.
The net loss, including the operating results for continuing and discontinued operations, for the first quarter of fiscal 2003 was ($345,000), or $(0.03) per fully diluted common share, compared to net income of $556,000, or $0.05 per fully diluted common share, for the first quarter of fiscal 2002.
The equipment backlog for Applied Films as of September 28, 2002 was $68.0 million, compared to $96.6 million at the end of the first quarter fiscal 2002 and $41.1 million at the end of fiscal 2002. We expect this backlog will be recognized as revenue over the next 6 to 12 months.
"We are pleased to report strong bookings of $53.7 million and a resulting book to bill ratio of 2:1 this quarter," Thomas Edman, president and chief executive officer commented. "The return of strong bookings in the flat panel display area as fifth generation color filter TFT investments accelerated is especially noteworthy. Our architectural and automotive glass deposition equipment area also reported strong order activity as the requirement for automotive related solar control coatings continues to grow. The web coater group delivered another fine quarter of bookings as well. We are hopeful that the bookings strength this quarter will continue in the coming quarters signaling sustained improvement in our key markets going forward."
Business Outlook
Demand remains strong as factory utilization rates in the Thin Film Transistor (TFT) flat panel display market remain above 90%, and flat panel penetration in the desktop monitor market approaches 35%. The flat panel desktop monitor market continues to grow and several flat panel display manufacturers are beginning to discuss plans for production of Liquid Crystal Display (LCD) televisions. At this time the major Korean and Taiwanese TFT flat panel manufacturers have begun expanding their fifth generation TFT production facilities.
Demand for web coaters used in packaging, capacitor and touch panel applications remains strong. We expect this trend to continue as new packaging requirements drive geographic expansion in that market. Growth in the Low- Emissivity architectural and automotive glass coating equipment business continues to be driven by automotive demand for better interior temperature efficiency. Automotive glass suppliers use Low-E glass to reduce air conditioning load thereby reducing emissions.
Our BESTPET(TM) process equipment for the coating of thin films on plastic bottles to extend shelf life is now running commercially in several bottling plants.
The following statements are based on our current expectations for the second quarter of fiscal 2003. These statements are forward-looking and subject to the qualifying safe harbor statement. Actual results may differ materially:
Fiscal 2003 - Second Quarter
-- Net Revenues: The Company expects net revenues for the second quarter
of fiscal 2003 to be between $26-$30 million.
-- Earnings Per Share: We expect a loss per share range of approximately
$(0.02)-$(0.07) per fully diluted share for the second quarter of
fiscal 2003.
-- We expect fully diluted shares outstanding to be approximately
11.4 million for the quarter.
First 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, October 17, 2002 to review first quarter fiscal year 2003 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 800.711.5301 or 785.832.0201 (International) at least 5-10 minutes prior to the start time (Conference ID: AFILM) 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 24, 2002. To listen to the replay, dial 888.566.0191 or 402.351.0790 (International).
Upcoming Events
Applied Films Corporation will be presenting at the AeA Classic Conference on November 5th and 6th in San Diego, California.
About Applied Films Corporation
Applied Films Corporation is 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. We also produce coated glass both directly and through a joint venture. Founded in 1976, the Company currently has approximately 480 employees worldwide with its headquarters in Longmont, Colorado, and operations in Alzenau, Germany; Brussels, Belgium; Hong Kong and Shanghai, China; Seoul, Korea; Tokyo and Osaka, Japan; and Hsinchu, 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, demand for flat panel displays, demand for various types of deposition equipment, future bookings, 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 Europe and Asia, the effect of overall market conditions and market acceptance risks. Our future results may also be affected by our ability to successfully manage and integrate the 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 Statements, Forms 10-K and Forms 10-Q.
APPLIED FILMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
For the Quarters Ended
September 28, September 29,
2002 2001(1)
(unaudited)
Net revenues $26,875 $39,273
Cost of goods sold 20,007 29,198
Gross profit 6,868 10,075
Operating expenses:
Selling, general and administrative 6,028 6,510
Research and development 2,262 2,034
Amortization of other intangible assets 889 839
Income (loss) from operations (2,311) 692
Other (expense) income:
Interest income (expense) 693 (53)
Other income (expense) 133 309
Equity earnings of joint venture 365 110
Income (loss) from continuing operations
before income taxes (1,120) 1,058
Income tax benefit (expense) 431 (378)
Income (loss) from continuing operations (689) 680
Discontinued operations(2):
Loss from discontinued operations,
net of income taxes (85) (124)
Gain on the disposal of discontinued
operations, net of income taxes 429 --
Discontinued operations net of taxes 344 (124)
Net income (loss) (345) 556
Preferred stock dividends -- (203)
Net income (loss) applicable to
common stockholders $(345) $353
Earnings (loss) per share:
Basic:
Earnings (loss) from continuing operations $(0.06) $0.07
Income (loss) from discontinued operations 0.03 (0.02)
Basic earnings (loss) per share $(0.03) $0.05
Diluted:
Earnings (loss) from continuing operations $(0.06) $0.07
Income (loss) from discontinued operations 0.03 (0.02)
Diluted earnings (loss) per share $(0.03) $0.05
Weighted average common shares outstanding:
Basic 11,035 6,798
Diluted 11,035 6,987
(1) Prior year amounts have been adjusted to show the operating results
of the Longmont Coatings Division, which was sold on September 24,
2002, as discontinued operations.
(2) Reflects the operations and the gain recognized from the sale of the
Longmont Coatings Division on September 24, 2002 as discontinued
operations.
APPLIED FILMS CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
September 28, June 29,
2002 2002(1)
ASSETS (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $36,709 $39,105
Marketable securities 50,570 43,544
Accounts and trade notes receivable,
net of allowance of $1,148 and $855 8,003 8,171
Revenue in excess of billings 26,317 27,246
Inventories, net 9,857 7,442
Prepaid expenses and other 1,229 1,845
Income tax receivable 1,202 --
Net current assets associated with
discontinued operations -- 2,932(1)
Total current assets 133,887 130,285
Property, plant and equipment, net of
accumulated depreciation of $4,629 and $4,333 5,938 6,239
Goodwill and other intangible assets, net of
accumulated amortization of $9,231 and $8,392 54,519 55,408
Investment in joint venture 10,265 10,004
Deferred tax asset, net 10,131 11,398
Long-term assets associated with
discontinued operations -- 1,401(1)
Other assets 334 373
Total assets $215,074 $215,108
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $11,814 $9,252
Accrued expenses 22,693 25,462
Billings in excess of revenue 13,266 8,213
Current portion of deferred gross profit,
deferred gain and lease obligation 401 414
Deferred tax liability 5,407 5,758
Total current liabilities 53,581 49,099
Long-term portion of gross profit, deferred
gain and lease obligation 2,329 2,427
Accrued pension benefit obligation 9,131 9,012
Total liabilities 65,041 60,538
STOCKHOLDERS' EQUITY:
Common stock, no par value, 40,000,000 shares
authorized, 11,065,310 and 11,027,310 shares
issued and outstanding at September 28, 2002
and June 29, 2002, respectively 159,718 159,610
Warrants and stock options 734 734
Other cumulative comprehensive
gain income (loss) (12,295) (7,995)
Retained earnings 1,876 2,221
Total stockholders' equity 150,033 154,570
Total liabilities & stockholders' equity $215,074 $215,108
(1) As adjusted to reclassify the assets and liabilities of the Longmont
Coatings Division to assets and liabilities associated with
discontinued operations for sale of the Longmont Coatings Division on
September 24, 2002.
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Source: Applied Films Corporation |
