COSTA MESA, Calif.--(BUSINESS WIRE)-- Ceradyne, Inc. (Nasdaq: CRDN) reported financial results for the first quarter ended March 31, 2010.

Sales for the first quarter 2010 were $110.0 million, compared with $99.8 million in first quarter 2009. Net income for the first quarter 2010 increased to $5.0 million, or $0.20 per fully diluted share, compared to $0.7 million, or $0.03 per fully diluted share in the first quarter 2009. The net income for the first quarter 2010 included a pre-tax charge for losses on auction rate securities of $1.9 million or a reduction of approximately $0.05 to fully diluted earnings per share. Fully diluted average shares outstanding for first quarter 2010 were 25,585,369 compared to 26,033,194 in the same period in 2009.

The Company is again reiterating its guidance for the full fiscal year 2010 initially given on October 27, 2009 and reiterated on January 11, and again on February 27, 2010 of $.60 per fully diluted share to approximately $1.05 per fully diluted share and sales from $380.0 to $430.0 million.

Gross profit margin was 23.1% of net sales in the first quarter 2010 compared to 23.6% in the same period in 2009. The provision for income taxes was 23.5% in first quarter 2010, compared to 39.8% in the first quarter 2009.

New orders for first quarter 2010 were $105.7 million, compared to $150.7 million for the same period last year. Total order backlog as of March 31, 2010 was $130.8 million, compared to $177.2 million at March 31, 2009.

Joel P. Moskowitz, Ceradyne president and chief executive officer, commented: “Although today’s reported financial results for the first quarter of 2010 were well within our projections, I believe a more interesting and positive analysis can be obtained by examining what areas contributed to the total Company performance.

“Lightweight Ceramic Body Armor. Sales in Q1 2010 were $30.9 million, down $15.4 million from $46.3 million in shipments in Q1 2009. To date, we have not received additional delivery orders for either XSAPI or ESAPI against the remaining $2.2 billion ID/IQ (Indefinite Delivery/Indefinite Quantity) contract which runs through October 2013. The wide range in our projections is based on the uncertainty of body armor delivery orders in time to ship in 2010. We have recently accelerated our marketing efforts related to lightweight ceramic body armor.

“ESK Ceramics. Sales of ESK’s products increased $8.1 million in Q1 2010 from $23.6 million in Q1 2009 to $31.7 million in Q1 2010. ESK’s pre-tax income turned sharply around from a pre-tax loss in Q1 of last year of $4.4 million to a pre-tax income in Q1 2010 of $2.1 million. Furthermore, gross margins this quarter were 23.3% compared to 14.3% in last year’s first quarter.

“Although ESK experienced about $1.4 million in revenue in Q1 2010 that may not repeat going forward, we believe that many of ESK’s core product lines, as well as some pricing strength, will continue to produce positive results from our Germany based operation.

“Solar Energy (Thermo Materials Division). Ceradyne’s Thermo Materials division, which includes ceramic crucibles used in the manufacture of photovoltaic solar cells, ceramic missile radomes, and PIC (precision investment casting) materials saw their sales increase 36.8% to $22.2 million from Q1 2009’s $16.2 million. Related gross profits increased to $7.8 million from last year’s Q1 of $5.8 million. In Q1 2010, the Company began construction of its new 218,000 square foot solar crucible manufacturing plant in Tianjin, . This new facility is expected to be operational early in 2011.

“Nuclear (Power Plant) Energy. Ceradyne’s entry into the nuclear energy market is predicated on the neutron absorbing properties of the element boron (B) and its isotope ¹⁰B. Our products consist of nuclear chemicals and ceramics based on our ability to separate the ¹⁰B isotope at our Ceradyne Boron Products subsidiary, nuclear waste containment structural components produced at our Ceradyne Canada subsidiary, and boron carbide powder used for control rods made in Kempten, , by our ESK Ceramics subsidiary.

“New bookings for our nuclear product lines increased to $14.7 million in Q1 2010 from $4.9 million in Q1 2009 with backlog of nuclear related materials at $23.8 million at March 31, 2010 up from $12.7 million at March 31, 2009.”

Moskowitz further stated, “Our goal of a more balanced, diversified product line with increasing levels of non-defense products while maintaining our military products at a reduced level from prior years is falling into place. Our strong balance sheet with $252.0 million in cash, cash equivalents and short-term investments should provide the financial strength to continue to invest in internal expansion, possible acquisitions, and stock and/or convertible bond repurchases.”

Conference Call and Webcast Information

Ceradyne will host a conference call today at 8:00 a.m. PDT (11:00 a.m. EDT) to review the financial results for the first quarter ended March 31, 2010. 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 67770207. 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 telephone playback will be available beginning at 11 a.m. PDT on April 27 through 11 a.m. PDT on April 30, 2010. The playback can be accessed by calling 800-642-1687 (or 706-645-9291 for international callers) and providing Conference ID 67770207.

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.

Please visit www.ceradyne.com Investor Relations to view 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