Applied Films Corporation Reports Record Bookings and 48% Revenue Growth for the Third Fiscal Quarter Of 2003
Thursday April 24, 8:31 am ET
LONGMONT, Colo., April 24 /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, and the consumer products packaging and electronics industries, today reported results for the third quarter of fiscal 2003, ended March 29, 2003.
Third Quarter Fiscal 2003 Results from Continuing Operations
Net revenues for the third quarter of fiscal 2003 were $45.7 million compared to $30.8 million for the third quarter of fiscal 2002, an increase of 48%. Revenues were 50% higher than the second quarter of fiscal 2003.
Income from continuing operations on a GAAP basis for the third quarter of fiscal 2003 was $569,000, or $0.05 per fully diluted common share, compared to a loss from continuing operations on a GAAP basis of $(875,000) or $(0.08) per fully diluted common share for the third quarter of fiscal 2002.
Earnings before amortization of other intangible assets (EBIA), for the third quarter of fiscal 2003 were $1,508,000, or $0.14 per fully diluted common share, compared to a loss of $(243,000) or $(0.02) per fully diluted common share for the third quarter of fiscal 2002.
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 third quarter was $967,000. The reconciliation of pro-forma non-GAAP measurements to GAAP can be found in the attached financial table.
Bookings for the quarter were $66.1 million. Equipment backlog as of March 29, 2003 was $96.4 million, compared to $56.0 million at the end of the third fiscal quarter of 2002, an increase of 72%, and compared to $75.9 million at the end of the second fiscal quarter of 2003. The Company expects to recognize revenue from this backlog over the next 6 to 12 months.
"We are pleased to report record bookings and a resulting book to bill ratio of 1.4, representing the third consecutive quarter of book to bill above one," Thomas Edman, president and chief executive officer commented. "This was an outstanding quarter for us, as we experienced bookings strength in all parts of our business, and we delivered strong bottom line performance while at the same time increasing our R&D spending by 57% over the prior year."
On September 24, 2002 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 income statement and balance sheet for the prior year and first quarter of the current 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 income statement.
Business Outlook
The following statements are based on our current expectations for the fourth quarter of fiscal 2003. These statements are forward-looking and subject to the qualifying safe harbor statement. Actual results may differ materially:
Fiscal 2003 - Fourth Quarter
* Net Revenues: We expect net revenues for the fourth quarter of
fiscal 2003 to be between $51-54 million.
* GAAP Earnings Per Share: We expect GAAP earnings per share in the
range of approximately $0.16 -$0.22 per fully diluted share for the
fourth quarter of fiscal 2003.
* We expect fully diluted shares outstanding to be approximately
11.4 million for the fourth quarter of fiscal 2003.
* Amortization of Intangibles: We expect the amortization of
intangibles to be approximately $950,000 for the fourth quarter of
fiscal 2003.
Third Fiscal Quarter 2003 Conference Call
Applied Films Corporation will conduct a conference call and webcast at 9:00 a.m. MT (11:00 a.m. ET) on Thursday, April 24, 2003 to review third 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 800.540.0559 or 785.832.0201 (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 May 1, 2003. To listen to the replay, dial 402.220.1144.
Upcoming Events
Applied Films Corporation will be presenting at the AeA Micro Cap Financial Conference held on May 13, 2003 in Monterey, 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. 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 sell coated glass produced at our 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, 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 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.
APPLIED FILMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
March 29, March 30, March 29, March 30,
2003 2002(1) 2003(1) 2002(1)
Net revenues $45,651 $30,827 $103,009 $107,985
Cost of goods sold 35,551 23,525 79,591 80,700
Gross profit 10,100 7,302 23,418 27,285
Operating expenses:
Selling, general and
administrative 5,819 5,827 17,731 18,946
Research and development 3,603 2,298 8,435 6,265
Amortization of other
intangible assets 967 839 2,757 2,517
Loss from operations (289) (1,662) (5,505) (443)
Other (expense) income:
Interest income (expense) 433 212 1,750 195
Other income (expense) 544 7 917 602
Equity earnings of
joint venture 432 150 1,661 413
Income (loss) from
continuing operations
before income taxes 1,120 (1,293) (1,177) 767
Income tax benefit (expense) (551) 418 551 (231)
Income (loss) from
continuing operations 569 (875) (626) 536
Discontinued operations(2):
Loss from discontinued
operations, net of tax -- (371) (85) (475)
Gain on disposal of
discontinued operations,
net of tax -- -- 429 --
Discontinued operations,
net of tax -- (371) 344 (475)
Net income (loss) 569 (1,246) (282) 61
Preferred stock dividends -- -- -- (315)
Net income (loss) applicable
to common stockholders $569 $(1,246) $(282) $(254)
Earnings (loss) per share:
Basic:
Earnings (loss) from
continuing operations $0.05 $(0.08) $(0.06) $0.02
Income (loss) from
discontinued operations -- (0.03) 0.03 (0.05)
Basic earnings (loss)
per share $0.05 $(0.11) $(0.03) $(0.03)
Diluted:
Earnings (loss) from
continuing operations $0.05 $(0.08) $(0.06) $0.02
Income (loss) from
discontinued operations -- (0.03) 0.03 (0.05)
Diluted earnings (loss)
per share $0.05 $(0.11) $(0.03) $(0.03)
Weighted average common
shares outstanding:
Basic 11,115 10,998 11,079 9,163
Diluted 11,145 10,998 11,118 9,163
(1) 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.
RECONCILIATION OF PRO-FORMA NON-GAAP MEASUREMENT TO GAAP
(in thousands, except per share data)
Three Months Ended Nine Months Ended
March 29, March 30, March 29, March 30,
2003 2002(1) 2003(1) 2002(1)
Pro Forma Financial Results
(EBIA):
Earnings (Loss) Before
Intangible Amortization:
Income (loss) from
continuing operations
before income taxes $1,120 $(1,293) $(1,177) $767
Add: Amortization of
Other Intangible Assets 967 839 2,757 2,517
Earnings (Loss) from
Continuing Operations
Before Intangible
Amortization and Taxes 2,087 (454) 1,580 3,284
Tax Benefit
(Provision) (3) (579) 211 28 (1,005)
Earnings (Loss) from
Continuing Operations
Before Intangible
Amortization $1,508 $(243) $1,608 $2,279
EBIA per share:
Basic EBIA Per Share $0.14 $(0.02) $0.15 $0.21(2)
Diluted EBIA Per Share $0.14 $(0.02) $0.14 $0.21(2)
Weighted Average Common
Shares Outstanding:
Basic 11,115 10,998 11,079 9,163
Diluted 11,145 10,998 11,118 9,163
(1) 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) Per share for the nine months ended have been adjusted to include the
$315,000 in dividends that were paid and included in GAAP EPS for the
same period.
(3) 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)
March 29, June 29,
2003 2002(1)
ASSETS (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $37,519 $39,105
Marketable securities 51,480 43,544
Accounts and trade notes receivable,
net of allowance of $1,068 and $855,
respectively 13,496 8,171
Revenue in excess of billings 30,530 27,246
Inventories, net 8,712 7,442
Prepaid expenses and other 1,470 1,845
Income tax receivable 444 --
Net current assets associated with
discontinued operations -- 2,932(1)
Total current assets 143,651 130,285
Property, plant and equipment,
net of accumulated depreciation of
$5,907 and $4,333, respectively 5,843 6,239
Goodwill and other intangible assets,
net of accumulated amortization of
$11,149 and $8,392 respectively 70,679 55,408
Investment in joint venture 11,413 10,004
Deferred tax asset, net 10,115 11,398
Long-term assets associated with
discontinued operations -- 1,401(1)
Other assets 289 373
Total assets $241,990 $215,108
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $19,571 $9,252
Accrued expenses 22,366 25,462
Billings in excess of revenue 12,643 8,213
Current portion of deferred gross profit,
deferred gain and lease obligation 390 414
Deferred tax liability 5,407 5,758
Total current liabilities 60,377 49,099
Long-term portion of gross profit,
deferred gain and lease obligation 2,142 2,427
Other long-term liabilities 21
Accrued pension benefit obligation 10,600 9,012
Total liabilities 73,140 60,538
STOCKHOLDERS' EQUITY:
Common stock, no par value, 40,000,000
shares authorized, 11,120,672 and
11,027,310 shares issued and outstanding
at March 29, 2003 and June 29, 2002,
respectively 160,246 159,610
Warrants and stock options 734 734
Other cumulative comprehensive
income (loss) 5,931 (7,995)
Retained earnings 1,939 2,221
Total stockholders' equity 168,850 154,570
Total liabilities and
stockholders' equity $241,990 $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 |
