COSTA MESA, Calif.--(BUSINESS WIRE)-- Ceradyne, Inc. (Nasdaq: CRDN) reported financial results for the fourth quarter and twelve months ended December 31, 2009.

Sales for the fourth quarter 2009 were $97.6 million, compared with $138.9 million in fourth quarter 2008. Net income for the three months ended December 31, 2009, was $14.1 million, or $0.55 per fully diluted share compared with net income in the prior year period of $20.7 million, or $0.79 per fully diluted share. Net income for the three months ended December 31, 2009 was favorably impacted by a tax benefit of $7.5 million due to a reversal of liabilities for uncertain tax positions as well as the tax benefits from the expenses and losses due to the closure of the Company’s Bazet, , manufacturing facility.

The Company is again reiterating its guidance for the full fiscal year 2010 initially given on October 27, 2009 and reiterated on January 11, 2010 of $0.60 per fully diluted share to approximately $1.05 per fully diluted share and sales from $380.0 to $430.0 million.

On January 11, 2010, the Company announced that its preliminary sales figure for 2009 would be approximately $401.0 million and gave guidance that the full year earnings would meet or slightly exceed approximately $0.60 per fully diluted share excluding special items. The special items include restructuring and goodwill impairment charges for all of 2009 and are detailed in the reconciliation table below. Based on the final results, sales for the twelve months ended December 31, 2009 were $400.6 million and the full year earnings, excluding special items, were approximately $0.73 per fully diluted share.

Gross profit margin was 27.0% of net sales in the fourth quarter 2009 compared to 37.1% in the same period in 2008. There was a benefit from income taxes for fourth quarter 2009 of $7.5 million compared to a provision for income taxes of $8.9 million in the same period in 2008.

Sales for the twelve months ended December 31, 2009 were $400.6 million, compared with $680.2 million in the same period last year. Net income for the twelve months ended December 31, 2009 was $8.5 million, or $0.33 per fully diluted share compared with net income in the prior year of $104.5 million, or $3.91 per fully diluted share. Net income for the twelve months ended December 31, 2009 was favorably impacted by a tax benefit of $8.1 million due to a reversal of liabilities for uncertain tax positions as well as the tax benefits from the expenses and losses due to the closure of our Bazet, , manufacturing facility. Net income for the twelve months ended December 31, 2009 included charges for restructuring and impairment that had a negative impact by reducing fully diluted earnings per share by approximately $0.40 for the twelve months ended December 31, 2009. The charges for restructuring and impairment totaled $18.7 million during the twelve months ended December 31, 2009 which included a pre-tax $10.3 million restructuring charge for the closure of our plant in Bazet, France, $2.7 million in other severance expenses, a non-cash pre-tax impairment charge of $3.8 million to write down the value of goodwill of its Ceradyne Canada reporting unit and accelerated depreciation of $1.9 million resulting from a revision of the estimated useful lives of certain assets.

Gross profit margin was 25.4% of net sales in the twelve months ended December 31, 2009 compared to 39.0% in the same period in 2008. There was a tax benefit of $8.1 million for the twelve months ended December 31, 2009, compared to a provision for income taxes of $56.4 million in 2008.

New orders for the three months ended December 31, 2009 were $76.7 million, compared to $90.2 million for the same period last year. For the year ended December 31, 2009, new orders were $407.3 million, compared to $566.8 million in 2008.

Total backlog as of December 31, 2009 was $135.5 million, compared to total backlog at December 31, 2008 of $126.4 million.

Joel P. Moskowitz, Ceradyne president and chief executive officer, commented: “We are pleased that the fourth quarter sales and earnings allowed us to meet our revised 2009 guidance for Q4 and all of 2009.

“During 2009, our management took a number of actions related to the decrease in lightweight body armor sales, as well as to reflect the realities of the global economic downturn. As summarized above, these 2009 restructuring and impairment charges totaled $18.7 million and were partially offset by an $8.3 million tax benefit associated with these charges.

“Although we are still concerned regarding the global economic outlook, the 2009 decisions should lay the groundwork for our future growth predicated on Ceradyne’s diversified advanced technical ceramic products and markets. We anticipate that there will continue to be less reliance on our military lightweight ceramic body armor, with increasing sales of our energy-related product offerings, particularly nuclear power plant applications and photovoltaic solar cell related components.

“Our strong year-end balance sheet with cash and cash equivalents, and short-term investments of approximately $240 million will allow us to finance our growth or possible acquisitions from internally generated funds.

“On January 11, 2010, Ceradyne held an investors’ reception entitled “Ceradyne – The Global Path Forward.” The Company displayed its military and non-military products, with the intent to demonstrate our commitment to a balanced global product line.

“In line with this strategy, we will begin construction this month of a new 218,000 square foot manufacturing facility at an estimated cost of $34.0 million in Tianjin, , to primarily support our Asian solar customers. Additionally, for the first time, we will also put in place Chinese manufacturing capacity for Ceradyne’s ESK Ceramics’ industrial, fluid handling, silicon carbide seals and bushings.

“Early in 2010 we have seen strong demand in for our ceramic solar crucibles, which supports our decision to increase capacity. Also, we continue to see increasing interest related to nuclear power plant requirements for our neutron absorbing ¹⁰B isotope, spent fuel rod storage products and special proprietary ceramics for nuclear fuel fabrication.

“In summary, we enter 2010 cautiously as our Company continues to evolve. Although we have accelerated our defense related technical and marketing efforts, additional body armor orders are uncertain. However, we are also focusing our efforts on a wide product base, with particular emphasis on solar, nuclear as well as oil and gas opportunities.”

Conference Call and Webcast Information

Ceradyne will host a conference call today at 8:00 a.m. PST (11:00 a.m. EST) to review the financial results for the fourth quarter and the year ended December 31, 2009. To participate in the teleconference, please call toll free 877-717-3046 (or 706-634-6364 for international callers) approximately 10 minutes prior to the above start time and provide Conference ID 55208513. Investors or other interested parties may listen to the teleconference live via the Internet at www.ceradyne.com or www.earnings.com. These web sites will also host an archive of the teleconference. A telephonic playback will be available beginning at 11:00 a.m. PST today through 11:00 a.m. PST on February 25, 2010. The playback can be accessed by calling 800-642-1687 (or 706-645-9291 for international callers) and providing Conference ID 55208513.

Information about Ceradyne, Inc.

Ceradyne develops, manufactures and markets advanced technical ceramic products and components for defense, industrial, automotive/diesel and commercial applications.

In many high performance applications, products made of advanced technical ceramics meet specifications that similar products made of metals, plastics or traditional ceramics cannot achieve. Advanced technical ceramics can withstand extremely high temperatures, combine hardness with light weight, are highly resistant to corrosion and wear, and often have excellent electrical capabilities, special electronic properties and low friction characteristics. Additional information can be found at the Company’s web site: www.ceradyne.com.

Except for the historical information contained herein, this press release contains forward-looking statements regarding future events and the future performance of Ceradyne that involve risks and uncertainties that could cause actual results to differ materially from those projected. Words such as "anticipates," "believes," "plans," "expects," "intends," "future," and similar expressions are intended to identify forward-looking statements. These risks and uncertainties are described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and its quarterly Reports on Form 10-Q, as filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date thereof.

To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company uses non-GAAP financial measures that exclude certain items and special charges, such as restructuring – plant closure and severance, and impairment charges. Management does not consider the excluded items part of day-to-day business or reflective of the core operational activities of the company as they result from transactions outside the ordinary course of business. Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. Certain guidance is provided on a non-GAAP (or "underlying") basis that excludes special charges and impairment charges. By disclosing non-GAAP financial measures, management intends to provide investors with a more meaningful, consistent comparison of the Company's core operating results and trends for the periods presented. Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

Please visit www.ceradyne.com, Investor Relations to view Ceradyne, Inc. Consolidated Statements of Income.

Contacts:
Ceradyne, Inc.
Jerrold J. Pellizzon
Chief Financial Officer
714-549-0421
or
Silverman Heller Associates
Phil Bourdillon/Gene Heller
310-208-2550