Speaking at the company’s annual meeting this morning, Wendell
P. Weeks, Corning Incorporated’s (NYSE: GLW) chairman, chief
executive officer, and president, told shareholders, “We’re
financially strong. We’re uniquely positioned to solve tough
technology problems. And we’re succeeding at building a bigger,
more balanced company.”
Weeks said that the company remains on track to reach $10
billion in sales within the next few years. However, he
acknowledged that Corning also experienced some surprises and
disappointments in the past year. “But when we step back and assess
the state of the company, we really like our hand,” he said.
“Corning’s growth opportunities are the strongest they’ve ever
been. And we are well prepared and equipped to manage the
challenges we face.”
2011 Results and 2012 First-Quarter Performance
Weeks described the company’s 2011 performance as “extremely
strong in a very tough environment.” He briefly summarized the
company’s 2011 year-end results, which included record sales of
$7.9 billion, record gross margin dollars, and double-digit sales
growth in four of Corning’s major business segments.
Weeks noted that profits were down, however, which has also
placed pressure on Corning’s stock performance. Weeks cited three
main factors: price declines in the LCD industry, higher taxes, and
lower equity earnings from Dow Corning Corporation.
Weeks explained that these trends also impacted the company’s
2012 first quarter results. On Wednesday, Corning reported that
sales were up 2% sequentially, including growth in the company’s
Telecommunications, Environmental Technologies, Specialty
Materials, and Life Sciences segments. However, net income was down
6% from last quarter.
Weeks noted that Corning is once again undergoing a transition
as the LCD industry begins to mature. But he reminded shareholders
that “evolution is part of Corning’s DNA.” Weeks asserted, “Our
leadership team knows how to manage transitions, and we are not
afraid of challenges.”
Clear Mandate, Strong Progress
Weeks devoted most of his remarks to explaining how Corning is
addressing its current challenges. He said, “We have a clear
mandate: We must form bottom and march up.”
Weeks outlined the four key steps the company is taking to
return to consistent earnings growth: (1) Re-establish positive
momentum in Display Technologies; (2) Capture growth opportunities
across Corning’s diverse businesses; (3) Create new revenue and
earnings streams; and (4) Deliver cost and functional
excellence.
He cited progress in each of these areas during the first
quarter. Highlights include launching a new equity venture with
Samsung Mobile Display to provide high-performance glass for
organic light-emitting diode displays; shipping the company’s first
order for solar glass; and announcing plans to acquire a majority
share of Becton, Dickinson and Company’s Discovery Labware
unit.
Moreover, Weeks noted that the company anticipates both sales
and profits to increase in Telecommunications, Environmental
Technologies, Specialty Materials, and Life Sciences in 2012. “We
have more horses pulling the wagon, and that makes us less
vulnerable to technology and market fluctuations,” he said.
Growth Opportunities
Looking ahead, Weeks described Corning’s future as “very
bright.” He said that megatrends continue to play to the company’s
strengths and drive growth opportunities across Corning’s
businesses. In particular, he noted the tremendous opportunities
for Corning as technology becomes more integrated into our daily
lives.
Weeks opened the meeting with a video portraying Corning’s
expanded vision of the future, which the company developed
following the viral success of its 2011 corporate video, A Day Made
of Glass. The videos portray a world of immersive displays,
intuitive interfaces, and real-time information – a world that
depends on highly engineered specialty glass and fiber-optic
technology. “We’re excited about this world of communication and
connection,” said Weeks, “because Corning is uniquely qualified to
help bring it to life.”
Corning’s first video has generated more than 18 million views
since its February 2011 release, and the sequel generated 1 million
views in its first week. But Weeks said he was most excited by the
feedback he has received from companies in diverse industries that
Corning’s technologies are vital.
He provided demonstrations of several Corning products and
capabilities that have generated strong interest from other
technology innovators. They included: Corning® Gorilla® Glass 2,
which is 20% thinner than original Gorilla® Glass and offers the
same legendary toughness and damage resistance; ultra-slim flexible
glass, which has the potential to revolutionize the way display
devices are manufactured; and antimicrobial glass, an early-stage
glass composition with the potential to kill drug-resistant
bacteria and viruses.
Value to Investors
Following his demonstrations, Weeks summarized the strengths he
believes Corning offers shareholders: financial stability,
diversified market positions tied to significant growth trends;
strong operating cash flow, which creates the opportunity to
enhance shareholder returns; and the potential for “explosive”
growth if even one or two new products succeed. “We think that’s a
pretty compelling package,” he said.
Special Acknowledgments
Weeks closed his remarks by acknowledging Corning’s 29,000
dedicated global employees and the company’s talented management
committee. He also paid tribute to Dr. Joseph Miller, 70, who
retires as Corning’s chief technology officer on April 30. Weeks
described Miller as “one of the strongest technology advocates this
company has ever had.”
Finally, he thanked William D. Smithburg, 73, for 25 years of
distinguished service on Corning’s Board of Directors. “Bill is one
of our country’s most respected business leaders,” said Weeks. “We
have been fortunate to benefit from his wisdom, judgment, and
uncompromising integrity for the past quarter century.”
Formal Business
During the meeting’s formal business, shareholders elected the
following 10 directors to one-year terms: John Seely Brown, 72,
retired chief scientist of Xerox Corporation; Stephanie A. Burns,
57, retired chairman and chief executive officer of Dow Corning
Corporation; John A. Canning, Jr., 67, co-founder and chairman of
Madison Dearborn Partners, LLC; Richard T. Clark, 66, retired
chairman, president, and chief executive officer of Merck &
Co., Inc.; James B. Flaws, 63, vice chairman and chief financial
officer, Corning Incorporated; Gordon Gund, 72, chairman and chief
executive officer of Gund Investment Corporation; Kurt M. Landgraf,
65, president and chief executive officer of Educational Testing
Service; Deborah D. Rieman, 62, managing director of Equus
Management Company and retired president and chief executive
officer of Check Point Software Technologies, Incorporated; H. Onno
Ruding, 72, retired vice chairman and director of Citicorp and
Citibank, NA; and Dr. Mark S.Wrighton, 62, chancellor and professor
of chemistry at Washington University in St. Louis.
Shareholders also approved the company’s executive compensation
as disclosed in the 2012 proxy statement; ratified
PricewaterhouseCoopers LLP as independent registered public
accounting firm for the 2012 fiscal year; approved adoption of the
2012 long-term incentive plan; and approved amendment and
restatement of the company’s Restated Certificate of Incorporation
to remove the provisions currently requiring supermajority
shareholder voting.
At its annual organizational meeting, Corning’s board of
directors appointed Gordon Gund as lead director. Mr. Gund was
re-elected by shareholders today, and has served on Corning’s board
since 1990. The board also elected Dr. David L. Morse, 60, as
executive vice president and Corning’s chief technology officer,
effective May 1, 2012.
Special Presentation
Immediately following the annual meeting, Mark A. Beck, senior
vice president and general manager of Corning Environmental
Technologies, provided an overview of Corning’s Environmental
Technologies business and growth opportunities. Beck explained the
key role that Corning’s emissions-control products have played in
improving air quality around the world. His presentation included a
demonstration of Corning’s DuraTrap® diesel particulate filter,
which traps 20 trillion particles of soot per second and reduces
engine pollutants by 99%. He noted that Corning expects sales in
Environmental Technologies to grow to approximately $1.4 billion by
2014, driven by global vehicle demand and a favorable regulatory
environment.
Audiocast Information
The company hosted a live audio teleconference of the 2012
annual meeting of shareholders from 11 a.m. to 12:15 p.m. EDT. A
replay of the call will be available within 48 hours. To access the
replay, go to Corning’s website at
www.corning.com/investor_relations and click Investor Events on the
left. No password is required. The audiocast will be archived on
the website 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 160 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.
View Related Videos: A Day Made of Glass | A Day Made of
Glass 2
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