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[February 2008]
Brush Engineered Materials Reports Record Annual Sales
Brush Engineered Materials Inc (Cleveland, OH, USA) has reported fourth quarter 2007 sales of US$236.3 million, up US$28.4 million or 14% compared to the fourth quarter of 2006. Net income for Q4 was US$12.3 million.
Fourth quarter earnings were negatively affected when compared to the prior year due to two factors. First, lower production, poorer yields and a weaker mix resulted in lower profits in Specialty Engineered Alloys. Secondly, lower sales were recorded in the Beryllium and Beryllium Composites segment due to a sizable non-repeat high margin programme that was completed in the prior year.
Fourth quarter 2007 was the twentieth consecutive quarter where sales were higher than the comparable quarter of the prior year and the ninth consecutive quarter of double-digit sales growth. While not up to the expectations coming into the quarter, the majority of the sales growth in the quarter was driven by demand from the data storage market for the company's new hard disk drive materials as the conversion to perpendicular media continues to ramp up.
Increased demand in disc drive arm materials and ToughMet® materials also contributed to the growth in sales. International sales continued to grow at a faster rate than domestic sales, reaching 46% of total sales in the quarter compared to 37% in the fourth quarter of the prior year. The majority of the international growth was in Asia where the company continues to expand its presence in China, Japan, Korea and Singapore.
For the year, sales were a record US$951.1 million, up US$188 million, or 25%, compared to the prior year. Sales growth, net of metal prices, was approximately 20%, the second consecutive year of organic growth above 20%. Net income for the year was US$53.3 million, compared to net income of US$49.6 million for 2006.
Operating profit margins continued to improve in 2007 reaching 8.9% of sales for the year. Excluding the net benefit of the items noted above and metal price inflation, operating profit was 6.4% of sales in 2007, compared to 5.7% in 2006. The operating margin improvement was driven by the leverage from the company's sales growth as well as the ongoing initiatives to lower costs and increase operating efficiencies.
The Beryllium and Beryllium Composites segment – which consists of beryllium products including beryllia ceramic manufactured by Brush Ceramic Products Inc – recorded Q4 sales of US$13.7 million, down 35%, compared to Q4 2006 sales of US$20.9 million.
Sales for 2007 of US$60.5 million were up US$2.9 million, or 5%, compared to the same period last year. Operating profit for Q4 was US$1.1 million versus US$4.6 million for Q4 2006. Operating profit for 2007 was US$7.8 million, as compared to operating profit of US$7.4 million for 2006.
The Beryllium and Beryllium Composites lower sales volume and related operating profit for the fourth quarter was due primarily to non-repeat sales in the fourth quarter 2006 for the Joint European Torus (JET), a nuclear fusion reactor. Defence sales of AlBeMet® materials continued to show strength throughout 2007 driven by tactical optics (including FLIR systems), airborne electronics and space systems. Medical and industrial X-ray and acoustic speaker product applications also contributed to the sales growth for the year.
ENDS