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Corning CEO Tells Shareholders: 'We Are a Stronger Company'

2010-05-10 13:04 1133

CORNING, N.Y., May 10 /PRNewswire-Asia/ -- On April 29th, 2010, Corning Incorporated (NYSE: GLW) Chairman and Chief Executive Officer Wendell P. Weeks (http://www.corning.com/investor_relations/corporate_governance/our_leadership/Wendell_Weeks.aspx ) told shareholders, "Corning is strong, financially healthy, and well-positioned for growth," at the company’s annual meeting this morning.

(Logo: http://www.prnasia.com/sa/20061026172020-74.jpg )

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 (http://www.corning.com/about_us/inside_corning/our_values.aspx ).

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 (http://www.corning.com/displaytechnologies/en/products/large_gen.aspx ) and the Pretium EDGE(TM) (http://www.corning.com/cablesystems/nafta/en/markets_applications/lanscape/pretiumedge.aspx ) optical network solution for data centers; expanding Corning’s fiber factory in Shanghai to capture market growth in China; and strengthening the Life Sciences (http://www.corning.com/lifesciences/worldwide.aspx ) 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 (http://www.corning.com/displaytechnologies/en/index.aspx ), driven by demand for LCD TV, and growth in Specialty Materials (http://www.corning.com/specialtymaterials/index.aspx ), led by customer pull for Gorilla(R) glass (http://www.corning.com/gorillaglass/index.aspx ). 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 (http://www.corning.com/environmentaltechnologies/index.aspx ) products, while the demand for higher bandwidth would drive long-term growth in Telecommunications (http://www.corning.com/products_services/telecommunications/index.aspx ).

He also shared examples from Corning’s new-product portfolio, including: next-generation drug discovery tools based on the Epic(R) system (http://www.corning.com/lifesciences/us_canada/en/whats_new/epic_system.aspx ); Green Lasers (http://www.corning.com/r_d/emerging_technologies/green_laser.aspx ), 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 (http://www.corning.com/investor_relations/corporate_governance/our_leadership/peter_volanakis.aspx ), 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 http://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 (http://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.

Source: Corning Incorporated
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