Speaking at the company’s annual meeting of shareholders this morning, Wendell P. Weeks, Corning Incorporated’s (NYSE: GLW) chairman, chief executive officer, and president, said, “The company is financially healthy, and we are confident in our ability to deliver sustainable growth and continue creating value for shareholders.” Weeks acknowledged the tough macroeconomic environment, but told shareholders, “Corning is tougher.”
2015 Performance and 2016 First Quarter Results
Weeks said that Corning increased its momentum in key areas in 2015, despite economic headwinds and foreign currency fluctuations. Highlights include:
- Launched new products such as Corning Lotus™ NXT Glass for high-performance displays and EDGE8™ Solutions for data centers;
- Secured the first windshield customer for Corning® Gorilla® Glass for Automotive;
- Strengthened position in Optical Communications with strategic acquisitions;
- Entered into an equity venture to capture a significant opportunity in pharmaceutical glass packaging;
- Announced a strategic realignment of Corning’s interest in Dow Corning.
Weeks noted that Corning continues to face challenges in 2016. On Tuesday, the company announced first quarter results that, while down year over year, were consistent with overall profit expectations. Weeks told shareholders that he expects growth to resume as the year progresses. “Meanwhile, we are generating strong, consistent operating cash flow, which allows us to reward our shareholders and invest in our future,” he said.
Capital Allocation Plans
Weeks explained that Corning expected to deploy more than $20 billion through 2019. The company plans to invest $10 billion to grow and sustain its leadership. Corning also plans to distribute more than $10 billion to shareholders through annual dividend increases by a low double-digit percentage per share and through share repurchases.
“We are executing on our plans,” said Weeks. The company completed a $1.25 billion accelerated stock repurchase program in January and repurchased an additional $751 million of outstanding shares during the first quarter. Corning’s board of directors also approved a 12.5% quarterly common stock dividend.
Turning to the company’s growth opportunities, Weeks said, “Key trends are driving long-term growth across today’s businesses, and our capabilities are becoming increasingly vital to a broad range of applications.”
Weeks shared examples of focus areas in Corning’s major business segments.
- In Display Technologies, the company is leveraging its fusion assets to drive the next round of display innovations, including thinner devices and more lifelike images.
- In Optical Communications, Corning is delivering new connectivity solutions that lower customers’ cost, improve network performance, and meet the unique needs of cloud data centers.
- In Specialty Materials, Corning is building on its leadership position in cover glass by increasing scratch resistance, improving drop performance, enhancing optical clarity, and enabling new form factors for mobile devices.
- In Environmental Technologies, the company is continuing its track record of making the air cleaner by developing particulate filters for gasoline direct-injection engines.
- In Life Sciences, Corning is creating new tools for drug development, production, storage, and delivery.
Weeks concluded his remarks by underscoring his confidence in Corning’s future based on the company’s track record of performance, distinctive capabilities, and robust innovation portfolio. He told shareholders, “We always keep our eyes on the prize – not just another 165 years of innovation and independence for Corning, but also a world with cleaner air, more effective medicine, richer entertainment experiences, and more efficient communication.”
During the meeting’s formal business, shareholders elected the following 13 directors to one-year terms: Donald W. Blair, 58; Stephanie A. Burns, 61; John A. Canning Jr., 71; Richard T. Clark, 70; Robert F. Cummings, Jr, 66; Deborah A. Henretta, 54; Daniel P. Huttenlocher, 57; Kurt M. Landgraf, 69; Kevin J. Martin, 49; Deborah D. Rieman, 66; Hansel E. Tookes II, 68; Wendell P. Weeks, 56; and Mark S. Wrighton, 66. They also ratified the appointment of PricewaterhouseCoopers as the company’s independent registered public accounting firm for 2016 and approved an advisory vote on executive compensation.
Following the meeting, Martin J. Curran, executive vice president and innovation officer, provided an overview of Corning’s Emerging Innovations Group. Curran shared examples of promising initiatives, including Corning Pharmaceutical Technologies, which is addressing the FDA’s push for higher pharmaceutical manufacturing standards by developing a “21st century glass” to reduce patients’ risks from contamination and breakage. He also explained how the company is leveraging Corning® Gorilla® Glass for Automotive to make cars cleaner and safer, while also enhancing the experience for drivers and passengers. Curran told shareholders, “We’re staying true to our strategy of growing through global innovation.”
The company hosted a live audio webcast of the 2016 annual meeting of shareholders in Corning, New York, from 11 a.m. to 12:15 p.m. EDT, April 28, 2016. To access the audio webcast, please go to www.corning.com/investor_relations, select “Events” and click on “More Information” next to the annual meeting event. No password is required. The audio webcast will be archived on the website for one year.
Presentation of Information in this News Release
Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP. Corning’s non-GAAP financial measures exclude the impact of items that are driven by general economic conditions and events that do not reflect the underlying fundamentals and trends in the company’s operations. The company believes presenting non-GAAP financial measures assists in analyzing financial performance without the impact of items that may obscure trends in the company’s underlying performance. Detailed reconciliations outlining the differences between these non-GAAP measures and the most directly comparable GAAP measure can be found on the company’s website by going to the Investor Relations page and clicking “Financial Highlights” under the “Performance” tab. These reconciliations also accompany this news release.
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.
Digital Media Disclosure
In accordance with guidance provided by the SEC regarding the use of company websites and social media channels to disclose material information, Corning Incorporated (“Corning”) wishes to notify investors, media, and other interested parties that it intends to use its website (http://www.corning.com/worldwide/en/about-us/news-events.html) to publish important information about the company, including information that may be deemed material to investors. The list of websites and social media channels that the company uses may be updated on Corning’s media and website from time to time. Corning encourages investors, media, and other interested parties to review the information Corning may publish through its website and social media channels as described above, in addition to the company’s SEC filings, press releases, conference calls, and webcasts.
About Corning Incorporated
Corning (www.corning.com) is one of the world’s leading innovators in materials science. For more than 160 years, Corning has applied its unparalleled expertise in specialty glass, ceramics, and optical physics to develop products that have created new industries and transformed people’s lives. Corning succeeds through sustained investment in R&D, a unique combination of material and process innovation, and close collaboration with customers to solve tough technology challenges. Corning’s businesses and markets are constantly evolving. Today, Corning’s products enable diverse industries such as consumer electronics, telecommunications, transportation, and life sciences. They include damage-resistant cover glass for smartphones and tablets; precision glass for advanced displays; optical fiber, wireless technologies, and connectivity solutions for high-speed communications networks; trusted products that accelerate drug discovery and manufacturing; and emissions-control products for cars, trucks, and off-road vehicles.