Uniroyal Technology Corporation Reports Third Quarter; 'Meets Street Estimates'

August 15 8:51am

Sarasota, FL. Uniroyal Technology Corporation (Nasdaq: UTCI) today reported net sales of $8.2 million for the third quarter ended July 1, 2001, a decline of 8% versus the $8.8 million for the third quarter of the previous year, reported on a comparable basis. Sales for the Compound Semiconductor & Optoelectronics business segment increased 283% for the third quarter versus the comparable period of the previous year.

However, more than offsetting this gain was a decline in sales of the more mature Coated Fabrics segment, which is being affected by the sluggish economy. The net sales reflect the results of the Company s Coated Fabrics and Compound Semiconductors & Optoelectronics business segments. In previous quarters, the Company also reported sales of its Specialty Adhesives business segment, but this segment is in the process of being sold and the results for this segment are being reported as a discontinued operation. All periods have been restated to reflect the change in the reporting of Specialty Adhesives.

The net loss per diluted common share was $0.14 for the third quarter including the results of Specialty Adhesives. Increased investment spending at the Company s Compound Semiconductor & Optoelectronics business segment, as well as the impact on Coated Fabrics of the slowing economy led to a net loss from continuing operations, excluding goodwill and other intangible amortization and unusual/non-recurring items, of $4.7 million or $0.18 per diluted common share for the third quarter ended July 1, 2001 versus a net loss of $2.0 million or $0.08 per diluted common share for the third quarter of the previous year. Both periods exclude the results of Specialty Adhesives. If the results of Specialty Adhesives were included, the net loss per diluted common share for the third quarters ended July 1, 2001 and July 2, 2000 would have been $0.14 and $0.04, respectively. On a reported basis, the net loss for the third quarter was $6.1 million or $0.23 per diluted common share versus a net loss of $1.8 million or $0.07 per diluted common share in the third quarter of the previous year.

Howard R. Curd, Chairman and Chief Executive Officer, commented, "We continue to focus the Company on our long-term strategy which is to become a leader in optoelectronics and silicon carbide applications. We are pleased with the progress we are making in the quality of our technology products and with the pace of our redeployment efforts to position the Company for significant growth in the high technology markets we have chosen." Sales for the Compound Semiconductor & Optoelectronics business segment increased 283% to $1.2 million in the third quarter versus the comparable period of the previous year. During the quarter, the Company achieved significant production and product integrity milestones in both its optoelectronics and silicon carbide operations. The loss before interest, taxes, minority interest and discontinued operations of $8.2 million reflects increased investment spending at the optoelectronics and silicon carbide facilities as well as the amortization of intangible assets associated with the purchase of Sterling Semiconductor, Inc., which occurred in May, 2000.

The economic weakness, particularly in the transportation markets, led to a decline of 18% in sales of the Coated Fabrics business segment versus the third quarter of the previous year. The decline in sales was the primary reason for the loss before interest, taxes, minority interest and discontinued operations of $202,000 in the current quarter versus income of $615,000 in the third quarter of the previous year.

For the thirty-nine weeks ended July 1, 2001, sales were $24.8 million versus $27.7 million for the forty weeks ended July 2, 2000. The decline of 10% versus the prior year is primarily due to a slowing in the economy, which has impacted the sales of the Coated Fabrics business segment, and the inclusion of an additional week in the prior year period. During the thirty- nine weeks ended July 1, 2001, sales for the Compound Semiconductor & Optoelectronics segment increased 83% versus the prior year period due to the acquisition of Sterling Semiconductor, Inc. (May, 2000) and an increase in sales of product produced at the optoelectronics facility in Tampa. Sales for the Coated Fabrics business segment declined 17% for the thirty-nine weeks as compared to the prior year, principally related to the slowness of the economy. The loss from continuing operations, excluding goodwill and other intangible amortization and unusual/non-recurring items, was $12.0 million or $0.46 per diluted common share versus income of $4.3 million or $0.15 per diluted common share on the same basis for the comparable period of the previous year. Both periods exclude the results of the Company s Specialty Adhesives business segment. If the results of Specialty Adhesives were included, the net loss per diluted common share for the nine months ended July 1, 2001 would have been $0.41 and the net income per common share for the nine months ended July 2, 2000 would have been $0.20. The decline was primarily due to increased investment spending in the current year and a favorable income tax adjustment in the preceding year. On a reported basis, the net loss for the nine months was $16.9 million or $0.65 per diluted common share versus net income of $60.8 million or $2.12 per diluted common share for the nine months of the preceding year. The preceding year included a significant gain on the sale of a business segment.

Uniroyal Technology s Compound Semiconductors & Optoelectronics business segment includes Uniroyal Optoelectronics, Sterling Semiconductor, Inc., and NorLux Corp. 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. Brand names include POWER-Ga(i)N(TM) and POWER-BR(ite)(TM). 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. NorLux Corp. specializes in the design and manufacture of custom lighting solutions utilizing light emitting diodes (LEDs). 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 common stock and warrants trade on the Nasdaq/NMS under the symbols UTCI and UTCIW, respectively.

CONFERENCE CALL WEDNESDAY, AUGUST 15, 2001, 4:00 P.M. EST THE CALL WILL WEBCAST SIMULTANEOUSLY AT WWW.UNIROYALTECH.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 manufacture and market its products. For the latest news about Uniroyal Technology Corporation, call 800-836-4014.

Contact: George J. Zulanas, CFO Tel: +1-941-361-2220 or Allan Fliss and Glen Turvey of Richartz, Fliss, Clark & Pope Tel: +1-973-627-8180