Uniroyal Technology Corporation Reports Third Quarter Results

Source: Uniroyal Technology Corporation

Sarasota, Fla. Uniroyal Technology Corporation (Nasdaq: UTCI) today reported a net loss from continuing operations, excluding goodwill amortization, of $0.05 per diluted common share for the third quarter of FY 2000, beating the consensus "street" estimates of a loss of $0.08 per diluted common share. Including goodwill amortization, the net loss per diluted common share from continuing operations was $0.07 for the third quarter of FY 2000. For the third quarter of FY 1999, net income from continuing operations, including and excluding goodwill amortization and unusual non-recurring items, was $0.01 income and $0.01 loss per diluted common share, respectively. Per share data for both periods reflects the two- for-one stock dividend payable to common shareholders of record on March 20, 2000.

Net sales from continuing operations for the third quarter of FY 2000 increased 16% versus the third quarter of FY 1999, excluding sales from the prior year period of the Coated Fabrics automotive business which was sold. Reported sales from continuing operations for the third quarter of FY 2000 declined 1% to $18.3 million versus $18.5 million for the third quarter of FY 1999.

Howard R. Curd, Chairman and Chief Executive Officer, stated, "We ve made significant progress during this past quarter in positioning the Company to be a premier participant in the fast growing optoelectronics and silicon carbide industries. We ve added highly respected research scientists and reactor capacity for our Optoelectronics business and we are quickly expanding the capabilities of Sterling for the production of silicon carbide wafers and epitaxy." The Company completed the acquisition of Sterling Semiconductor, Inc. (Sterling) on May 31, 2000. "We continue to invest heavily in the short- term for long-term success," Curd stated.

Sales of Naugahyde(R) products increased 14% in the third quarter versus the third quarter of the prior year. Virtually all major distribution channels of Naugahyde recorded sales gains in the third quarter versus the prior year period. Overall, the Coated Fabrics segment declined 17% in sales versus the third quarter of FY 1999 due to the transitional phase out of the automotive business which has been sold. The decline in income versus the prior year period is due to the absence of automotive sales at the Stoughton, Wisconsin facility.

Sales for the Specialty Adhesives segment increased 18% in the third quarter versus the prior year period. Increased unit volume for both branded industrial products, Silaprene(R) and Hydra Fast-En(R), and roofing adhesives and sealants led to the strong gain in sales. Income was up sharply in the third quarter versus the prior year period due to the overall increase in sales, but especially due to the gains in sales of the higher priced branded industrial products. Sales for the Compound Semiconductor and Optoelectronics segment increased in the third quarter of FY 2000 to $304,000 versus $253,000 in the third quarter of the preceding year. The loss of $4,961,000 is primarily due to the increased costs associated with the ramp-up at the Company s high brightness light emitting diode facility in Tampa, Florida, and goodwill amortization associated with the purchase of Sterling. The Sterling acquisition will be accounted for as a purchase and, subject to the receipt of a definitive appraisal, the Company may account for some portion of the purchase consideration as acquired in-process research in the quarter ending October 1, 2000.

For the forty-week period ended July 2, 2000, sales declined 8% to $49.6 million versus $53.6 million for the thirty-nine week period ended June 27, 1999. Excluding the automotive sales of the Coated Fabrics segment from both periods, sales increased 16% versus the prior year period. Net income for the forty-week period ended July 2, 2000 was $60,818,000, or $2.12 per diluted common share, versus net income of $3,009,000 or $0.12 per diluted common share for the thirty-nine week period ended June 27, 1999. During the forty- week period ended July 2, 2000, the Company recorded a gain, net of tax, of $57,102,000 primarily due to the sale of its High Performance Plastics business segment which was sold on February 28, 2000, which was partially offset by other unusual non-recurring adjustments of approximately $4,705,000, net. Net income from Continuing Operations, excluding goodwill amortization and unusual non-recurring charges, was $5,734,000 or $0.20 per diluted common share for the forty-week period ended July 2, 2000, versus a loss of $945,000 or $0.04 per diluted common share for the thirty nine-week period ended June 27, 1999.

Uniroyal Technology s Compound Semiconductor and Optoelectronics business segment includes Uniroyal Optoelectronics and Sterling Semiconductor, Inc. Uniroyal Optoelectronics manufactures high brightness light emitting diodes (HB-LEDs), a rapidly growing market with applications such as traffic signals, indoor/outdoor signage and automotive applications. Sterling Semiconductor is a leading producer of silicon carbide (SiC) substrates, epitaxial thin films on SiC substrates and is developing SiC devices for wireless communications, industrial process control, and power amplification. Well-known brand names in Uniroyal s Coated Fabrics and Specialty Adhesives segments include NAUGAHYDE(R) and NAUGASOFT(R) in coated fabrics and, SILAPRENE(R), HYDRA FAST-EN(R) and GUNTHER ULTRA/BOND(R) in adhesives. The Company s stock and warrants trade on the Nasdaq/NMS under the symbols UTCI and UTCIW, respectively. CONFERENCE CALL - AUGUST 16, 2000, 1:00 P.M. EST THE CALL WILL BE SIMULTANEOUSLY WEBCAST AT WWW.STREETEVENTS.COM

Statements made herein that are forward-looking in nature within the meaning of the Private Securities Litigation Reform Act of 1995 are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include, but are not limited to, those related to business conditions and the financial strength of the various markets served by the Company, the level of spending for such products and the ability of the Company to successfully develop, commercialize, qualify, manufacture and market its products.

Contact: George J. Zulanas, Jr., CFO of Uniroyal, Tel: 941-361-2220 or Mark N. Tyler of TT Communications Tel: 212-962-3690