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 have a tremendous set of growth opportunities, and we’re confident in our ability to build a bigger, more balanced company. ” He noted that Corning celebrates its 160th birthday this year and said, “I honestly think this is one of the most exciting times in the company’s history.”
2010 Results and 2011 First Quarter Performance
Weeks described 2010 as an “outstanding year” for Corning. He briefly summarized the company’s year-end results, which included sales growth of 23%; record net income and earnings per share, excluding special items; improved gross margins; and record positive free cash flow.
He observed that Corning “did much more than deliver great financial results,” citing the company’s improved position in China, new customer wins for the Pretium EDGE™ solution for data-centers, and strong demand for Corning® Gorilla® Glass, which tripled sales over 2009.
“Most importantly, we’ve continued to innovate,” said Weeks, pointing to the 264 patents Corning earned in 2010 (up more than 40% from 2009), and new product introductions such as EAGLE XG® Slim glass and Synthemax™ cell growth surfaces.
“And we’re off to a great start in 2011,” said Weeks. Yesterday, the company reported first quarter sales of $1.9 billion and growth in all business segments.
Turning to the future, Weeks remarked, “Corning’s growth opportunities are the strongest they’ve been in my time with the company, and arguably in the past 160 years.” He noted that key trends play to Corning’s strengths and “are creating problems that we are uniquely positioned to solve.”
One trend is the demand for ubiquitous access to information. Corning opened the meeting with its company video titled, “A Day Made of Glass,” which has become the most-viewed corporate video of all time on YouTube.
Weeks talked shareholders through the video scenarios, which depict “seamless delivery of real-time information… where everyday surfaces are transformed from one-dimensional utilities into sophisticated electronic devices.”
He concluded, “This world requires the kinds of highly engineered specialty glass made by Corning.”
Other key trends driving Corning’s growth include the need for “massive bandwidth” to facilitate real-time information and on-demand connections; the push for a greener environment, which creates demand for Corning’s emissions-control products; and the need for more productive pharmaceutical research, which drives demand for Corning’s innovative drug-discovery tools.
“Based on these trends,” Weeks said, “we believe we have the potential to grow to $10 billion in sales by 2014.”
Weeks noted that a significant portion of Corning’s growth will come from China, which is currently the world’s largest market for several of the company’s major products. He explained that geographic diversity helps mitigate Corning’s volatility and added, “We’re proud to apply American innovation and manufacturing to solve some of the world’s toughest problems.”
Weeks closed his remarks by acknowledging the talent of the company’s leadership team and the “outstanding execution” by Corning’s 26,000 global employees.
He also paid tribute to James J. O’Connor, 74, who retired today from Corning’s board of directors. Weeks thanked O’Connor for more than 26 years of dedicated service, which included serving as lead director since 2002. Weeks told shareholders, “He has truly helped make Corning a better company.”
During the meeting’s formal business, shareholders elected the following six directors to one-year terms: John Seely Brown, 71, retired chief scientist of Xerox Corporation; John A. Canning, Jr., 66, co-founder and chairman of Madison Dearborn Partners, LLC; Gordon Gund, 71, chairman and chief executive officer of Gund Investment Corporation;
Kurt M. Landgraf, 64, president and chief executive officer of Educational Testing Service; H. Onno Ruding, 71, retired vice chairman and director of Citicorp and Citibank, NA; and Glenn F. Tilton, 63, chairman of the board of United Continental Holdings, Inc.
Shareholders also approved the company’s executive compensation as disclosed in the 2011 proxy statement; voted in favor of having annual advisory votes on executive compensation; and ratified PricewaterhouseCoopers LLP as independent registered public accounting firm for the 2011 fiscal year. A non-binding shareholder proposal requesting that the board allow 10% of shareholders to call special meetings failed.
At its annual organizational meeting, Corning’s board of directors appointed William D. Smithburg, 72, as lead director. Mr. Smithburg is retired chairman, president, and chief executive officer of The Quaker Oats Company. He has served on Corning’s board since 1987.
Immediately following the annual meeting, James R. Steiner, senior vice president and general manager of Corning Specialty Materials, provided an overview of Corning’s Gorilla® Glass business. He shared examples from the Gorilla® Glass marketing campaign, and demonstrated the product’s exceptional toughness by dropping a steel ball weighing 1.8 kilograms (approximately 4 pounds) onto the glass.
Steiner told shareholders that Corning® Gorilla® Glass grew from $19 million in sales in 2007 to more than $240 million in 2010, and noted that it was one of the fastest-growing products in Corning’s history. He added, “We have sold more in our first quarter this year than in our first three years combined.”
Corning® Gorilla® Glass is now used by more than 30 major brands and designed into more than 400 electronic devices. Steiner also shared examples of potential applications in the automotive, appliance, and architectural markets.
The company hosted a live audio webcast of the 2011 annual meeting of shareholders in Corning, N.Y., from 11 a.m. to 12:15 p.m. EDT, April 28, 2011. To access the webcast, please go to www.corning.com/investor_relations, select “Investor Events” in the left-hand column, and click on “More Information" next to the archived event. No password 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 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.