Corning Incorporated (NYSE: GLW) Chairman and Chief Executive
Officer Wendell P. Weeks told shareholders, “Corning is strong,
financially healthy, and well-positioned for growth,” at the
company’s annual meeting this morning.
Weeks acknowledged Corning’s improved position since last year’s
meeting, and explained that a combination of defensive and
offensive actions enabled the company to successfully weather the
global recession.
He reminded shareholders that, despite the recession’s
significant impact on all of Corning’s businesses, the Management
Committee had remained confident in Corning’s ability to navigate
the challenges. He attributed this confidence to the company’s
preparedness entering the recession, the talent of Corning’s
people, and a clear set of operating priorities. These priorities
were to protect the financial health of the company by conserving
cash; invest in the future to create new revenue streams; and
continue to live Corning’s Values.
Weeks noted that protecting Corning’s financial health had
required painful cost-cutting actions and explained how Corning’s
“Rings of Defense” model helped the company make difficult
decisions in a thoughtful way consistent with its Values. He also
emphasized that seizing opportunities to strengthen Corning’s
competitive position was a critical part of the company’s 2009
operating plan.
He concluded: “Our 2009 performance proved that our plan was
effective and our confidence was well placed.”
2009 and First Quarter 2010 Performance
Weeks briefly summarized the company’s 2009 performance,
including delivering sales of $5.4 billion, which exceeded the
company’s target and Wall Street expectations at the beginning of
the year.
“But we did more than deliver the bottom line,” Weeks explained.
“We continued to invest in Corning’s future.”
He shared several examples of how Corning strengthened its
position, including launching innovative new products such as Gen
10 LCD glass and the Pretium EDGE™ optical network solution for
data centers; expanding Corning’s fiber factory in Shanghai to
capture market growth in China; and strengthening the Life Sciences
segment with the acquisition of Axygen BioScience, Inc.
Weeks noted that Corning’s performance to date in 2010
demonstrates continued improvement. The company’s first quarter
results (announced yesterday) included: sales of $1.55 billion;
earnings per share of $0.52; gross margin improvement to 47
percent; and excellent results across all the company’s major
business and equity companies.
“These results reinforce the fact that Corning not only pulled
through the worst economic recession since the Great Depression, we
emerged as a stronger company,” said Weeks.
Growth Opportunities Ahead
Turning to the future, Weeks remarked, “There’s a lot to be
excited about as Corning approaches its 160th anniversary.”
He noted that Corning has growth opportunities in all its major
businesses. Highlights include continued strength in Display
Technologies, driven by demand for LCD TV, and growth in Specialty
Materials, led by customer pull for Gorilla® glass. He told
shareholders that Gorilla glass has the potential to be a $1
billion-or-larger business within a few years.
In addition, Weeks observed that tightening emissions
regulations would continue to drive demand for Corning’s
Environmental Technologies products, while the demand for higher
bandwidth would drive long-term growth in Telecommunications.
He also shared examples from Corning’s new-product portfolio,
including: next-generation drug discovery tools based on the Epic®
system; Green Lasers, which enable portable microprojection; and
photovoltaics technology, which leverages Corning’s fusion-formed
glass expertise for solar-energy applications.
Weeks ended his remarks by noting, “We can’t eliminate
volatility from Corning’s business, but it should be evident from
our performance that we have built the company to survive difficult
times, and we are committed to always living our Values.”
Tribute to Houghton
Following his remarks on the state of the company, Weeks
acknowledged and thanked former Chairman and CEO James R. Houghton,
74, who retires today as a director after serving 41 years on
Corning’s board of directors.
Weeks cited highlights from Houghton’s career, including leading
Corning’s transformation into a high-technology company, launching
Corning’s Total Quality Management initiative, and being a champion
for cultural diversity in the workforce.
He also credited Houghton with restoring confidence in Corning
when he returned to the position of CEO in 2002, at a time when the
company was struggling. “Thanks to Jamie’s confidence in Corning,
and the confidence that he, in turn, inspired in our stakeholders,
we had the opportunity to execute our strategy and build a stronger
company,” explained Weeks.
Weeks noted, “Thanks to his leadership, the institution and
Corning’s Values will endure.”
A video tribute followed Weeks’ remarks.
Formal Business
During the meeting’s formal business, shareholders elected the
following five directors to three-year terms: Robert F. Cummings,
Jr., 60, retired partner of Goldman Sachs & Co.; Carlos M.
Gutierrez, 56, former U.S. Secretary of Commerce and former
chairman and chief executive of the Kellogg Company; William D.
Smithburg, 71, retired chairman, president, and chief executive
officer of the Quaker Oats Company; Hansel E. Tookes, II, 62,
retired chairman and chief executive officer of Raytheon Aircraft
Company; and Wendell P. Weeks, 50, chairman and chief executive
officer of Corning Incorporated.
Shareholders also approved the ratification of
PricewaterhouseCoopers LLP as the independent registered public
accounting firm for the 2010 fiscal year; adopted the 2010 variable
compensation plan; adopted the 2010 equity plan for non-employee
directors; approved amending and restating the company’s restated
certificate of incorporation to declassify the board of directors;
and passed a non-binding shareholder proposal requesting that the
board eliminate super-majority voting. The board agreed to review
the results on the shareholder proposal at a future meeting.
Adjacent Innovation Opportunities
In a special presentation immediately following the meeting,
Peter F. Volanakis, Corning’s president and chief operating
officer, provided an overview of the company’s “adjacent
innovation” strategy.
Volanakis explained that trends in the consumer electronics,
solar, and telecommunications industries are creating new
opportunities for Corning. He defined adjacent innovation as
leveraging Corning’s current technical and manufacturing
capabilities to capture these opportunities.
Volanakis spotlighted several potential consumer electronics
applications for Corning’s fusion-formed flat glass, including
notebook and slate computers, touch-screens, and TV cover glass. He
also briefly noted other adjacent opportunities, including
Thin-Film Photovoltaics; Indoor Distributed Antenna Systems (IDAS),
which enable wireless networks inside buildings; and
Very-Short-Distance Networks (VSDN), which enable high-speed
device-to-device interconnectivity for home networking and consumer
electronics applications.
Volanakis noted, “In total, these adjacencies could be worth
several billion dollars in new revenues.”
Webcast Information
The company hosted a live audio webcast of the 2010 annual
meeting of shareholders in Corning, N.Y., from 11 a.m. to 12:15
p.m. EDT, April 29, 2010. To access the webcast archive, please go
to www.corning.com/investor_relations and click on the webcast
archive link. No password or registration is required. The audio
webcast will be archived on the Web site for one year following the
broadcast.
Forward-Looking and Cautionary Statements
This press release contains “forward-looking statements” (within
the meaning of the Private Securities Litigation Reform Act of
1995), which are based on current expectations and assumptions
about Corning’s financial results and business operations, that
involve substantial risks and uncertainties that could cause actual
results to differ materially. These risks and uncertainties
include: the effect of global political, economic and business
conditions; conditions in the financial and credit
markets; currency fluctuations; tax rates; product demand
and industry capacity; competition; reliance on a concentrated
customer base; manufacturing efficiencies; cost reductions;
availability of critical components and materials; new product
commercialization; pricing fluctuations and changes in
the mix of sales between premium and non-premium products; new
plant start-up or restructuring costs; possible
disruption in commercial activities due to terrorist activity,
armed conflict, political or financial instability, natural
disasters, adverse weather conditions, or major health concerns;
adequacy of insurance; equity company activities; acquisition and
divestiture activities; the level of excess or obsolete inventory;
the rate of technology change; the ability to enforce patents;
product and components performance issues; retention of key
personnel; stock price fluctuations; and adverse litigation or
regulatory developments. These and other risk factors
are detailed in Corning’s filings with the Securities and
Exchange Commission. Forward-looking statements speak only as of
the day that they are made, and Corning undertakes no obligation to
update them in light of new information or future events.
About Corning Incorporated
Corning Incorporated (www.corning.com) is the world leader in
specialty glass and ceramics. Drawing on more than 150 years of
materials science and process engineering knowledge, Corning
creates and makes keystone components that enable high-technology
systems for consumer electronics, mobile emissions control,
telecommunications and life sciences. Our products include glass
substrates for LCD televisions, computer monitors and laptops;
ceramic substrates and filters for mobile emission control systems;
optical fiber, cable, hardware & equipment for
telecommunications networks; optical biosensors for drug discovery;
and other advanced optics and specialty glass solutions for a
number of industries including semiconductor, aerospace, defense,
astronomy and metrology.
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