SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: (Date of earliest event reported) April 24, 2003
CORNING INCORPORATED
(Exact name of registrant as specified in its charter)
New York 1-3247 16-0393470
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
One Riverfront Plaza, Corning, New York 14831
(Address of principal executive offices) (Zip Code)
(607) 974-9000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events and Regulation FD Disclosure.
On April 22, 2003, Corning Incorporated issued a press release setting forth
Corning's first quarter 2003 earnings. A copy of Corning's press release is
filed herewith as Exhibit 99.1 and hereby incorporated by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release dated April 22, 2003.
Item 9. Regulation FD Disclosure.
On April 24, 2003, Corning Incorporated issued a press release relating to its
annual meeting of shareholders and that press release is furnished herewith as
Exhibit 99.2.
(c) Exhibits
99.2 Press release dated April 24, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CORNING INCORPORATED
Registrant
Date: April 24, 2003 By /s/ KATHERINE A. ASBECK
------------------------------------
Katherine A. Asbeck
Senior Vice President and Controller
Exhibit 99.1
FOR RELEASE -- APRIL 22, 2003
Media Relations Contact: Investor Relations Contact:
Daniel F. Collins Kenneth C. Sofio
(607) 974-4197 (607) 974-7705
collinsdf@corning.com sofiokc@corning.com
Corning Reports First-Quarter Results
Performance exceeds guidance
Continued strength seen in LCD market
CORNING, N.Y. -- Corning Incorporated (NYSE:GLW) today announced that its
first-quarter results exceeded quarterly guidance and sales increased
sequentially for the first time in two years. The company said sales were $746
million and that it recorded a net loss of $205 million or $0.17 per share. This
net loss includes $201 million or $0.17 per share of charges primarily related
to the previously announced asbestos litigation settlement and restructuring and
impairment charges.
James R. Houghton, chairman and chief executive officer, said, "We are extremely
pleased with the improvement in our quarterly performance. Our results reflect
stronger than expected demand for fiber and cable in Japan and the continued
strength of our technologies businesses, particularly the Display Technologies
and Environmental Technologies businesses." Houghton said that the company
continues to focus on its goal of returning to profitability by the third
quarter of this year. "We are seeing significant improvement in our gross margin
and lower operating costs due to our restructuring efforts over the past year,"
he said.
Previously Announced Charges
Corning said its first-quarter results include net charges totaling $345 million
($201 million after-tax and minority interest) or $0.17 per share. These include
the following:
. A previously announced charge of $298 million ($192 million after-tax)
for asbestos litigation related to Pittsburgh Corning Corporation.
. Net restructuring and impairment charges of $51 million ($12 million
after-tax and minority interest) related to the previously announced
decisions to shut down Corning Asahi Video (CAV) and the optical
switching business, offset by adjustments to the company's existing
restructuring reserves.
. A net gain of $4 million ($3 million after-tax) related to the
repurchase of debt using cash and common stock.
(more)
Corning Reports First-Quarter Results
Page Two
First-Quarter Operating Results
Sales for the quarter of $746 million represent a sequential increase from
fourth- quarter sales of $736 million. Telecommunications segment sales were
$352 million, compared to fourth-quarter sales of $363 million. Fiber volume
increased approximately 15 percent sequentially due to stronger than expected
demand in Japan and China, offset by continued softness in North America and
Europe. Sequential price declines, as expected, were in the 10 to 15 percent
range for the quarter.
Corning Technologies recorded first-quarter sales of $388 million, an increase
over fourth-quarter sales of $367 million. Corning's display glass sales were
fueled by strong demand for flat screen desktop monitors, the popularity of
notebook computers and growing interest in liquid crystal display (LCD)
televisions. Sequential quarterly display glass volume gains were about 10
percent and LCD glass pricing was stable. Corning's environmental products
business experienced volume increases worldwide. Both of these businesses
benefited from favorable exchange rates.
Corning's first-quarter results benefited from the initial recognition of $17
million of equity earnings from Dow Corning Corporation. Corning's total equity
earnings for the first quarter were $59 million.
Liquidity Update
Corning said that it ended the first quarter with $1.85 billion in cash and
short-term investments, a decline from $2.1 billion at the end of last year. The
decline was primarily due to the use of cash to retire debt. Operating cash flow
included a $191 million federal income tax refund.
In the first quarter, Corning used $251 million for scheduled debt repayments
and open market repurchases. In addition, Corning exchanged 6.5 million shares
of Corning common stock for debt with an accreted value of $43 million. Corning
said that it might continue from time-to-time to retire its debt securities in
open market, privately negotiated or other transactions. Corning ended the
quarter with a debt-to-capital ratio of 45.6 percent, down from 46.7 percent
from year-end.
Second-Quarter Outlook
Corning said that it expects second-quarter sales to be in the range of $715
million to $745 million. It also anticipates results in the range of a loss of
$0.02 per share to income of $0.01 per share. These results exclude the impact
of previously announced restructuring charges and any adjustments to the
asbestos settlement reserve required by movement in Corning's stock price.
(more)
Corning Reports First-Quarter Results
Page Three
Corning expects continued strong performance from its LCD glass business, with
sequential volume gains of about 10 percent and stable pricing. Second quarter
fiber volumes are expected to decline sequentially by about 25 percent, driven
by the seasonal slowdowns in Japan and the continued softness across the North
American market.
Corning said it also continues to explore a number of options for its Photonic
Technologies business and expects to reach a decision by mid-year.
James B. Flaws, vice chairman and chief financial officer, said, "Putting aside
the strength of our fiber and cable business in Asia last quarter, we are not
seeing a lift in our telecommunications businesses, but this does not surprise
us. Global events, the long winter in North America and the overall malaise in
the economy appear to be delaying any potential seasonal improvements in telecom
sales. We anticipate that with normal seasonality in the Japanese fiber market,
there will be a pick up in volume in the second half of the year.
Flaws said that the company has been closely monitoring external trends across
all its markets and said, "While it is too early to tell, there are indications
that a general economic slow down in North America may affect some of Corning's
businesses such as Environmental Technologies where potential inventory
corrections in the auto industry could dampen second-quarter sales. However, our
plan to return to profitability is mostly dependent on strong performance of our
display business and our own cost cutting actions. Our first-quarter performance
on these fronts was strong and we remain optimistic that our profitability goal
is achievable."
About Corning Incorporated
Established in 1851, Corning Incorporated (www.corning.com) creates leading-edge
technologies that offer growth opportunities in markets that fuel the world's
economy. Corning manufactures optical fiber, cable and photonic products in its
Telecommunications segment. Corning's Technologies segment manufactures
high-performance display glass, and products for the environmental, life
sciences, and semiconductor markets.
First-Quarter Conference Call Information
The company will host a first quarter conference call at 8:30 a.m. ET on
Wednesday, April 23, 2003. To access the call, dial (312) 470-0008. The password
is Corning. The leader is Sofio. A replay of the call will begin at
approximately 10:30 a.m. ET and will run through 5 p.m. ET, Wednesday, May 7,
2003. To listen, dial (402) 220-4617, no passcode required. To listen to a live
audio webcast of the call at 8:30 a.m. on Wednesday, April 23, please go to our
Web site and follow the instructions: http://www.corning.com/investor_relations.
The webcast will be archived for 14 days following the call.
(more)
Corning Reports First-Quarter Results
Page Four
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements that involve a variety of
business risks and other uncertainties that could cause actual results to differ
materially. These risks and uncertainties include the possibility of changes or
fluctuations in global economic conditions; currency exchange rates; product
demand and industry capacity; competitive products and pricing; availability and
costs of critical components and materials; new product development and
commercialization; order activity and demand from major customers; capital
spending by larger customers in the telecommunications industry and other
business segments; the mix of sales between premium and non-premium products;
possible disruption in commercial activities due to terrorist activity and armed
conflict; ability to obtain financing and capital on commercially reasonable
terms; acquisition and divestiture activities; the level of excess or obsolete
inventory; the ability to enforce patents; product and components performance
issues; and litigation. These and other risk factors are identified 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.
###
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in millions, except per share amounts)
For the three months ended
March 31,
----------------------------
2003 2002
---------- ----------
Net sales $ 746 $ 839
Cost of sales 546 655
--------- ---------
Gross margin 200 184
Operating expenses:
Selling, general and administrative expenses 152 188
Research, development and engineering expenses 93 126
Amortization of purchased intangibles 9 11
Restructuring, impairment and other charges and credits 51
--------- ---------
Operating loss (105) (141)
Interest income 8 14
Interest expense (40) (48)
Asbestos settlement (298)
Gain on repurchases of debt, net of inducements 4
Other expense, net (14) (9)
--------- ---------
Loss from continuing operations before income taxes (445) (184)
Benefit for income taxes (144) (50)
--------- ---------
Loss from continuing operations before minority interests
and equity earnings (301) (134)
Minority interests 37 6
Equity in earnings of associated companies 59 30
--------- ---------
Loss from continuing operations (205) (98)
Income from discontinued operations, net of income taxes 8
--------- ---------
Net loss $ (205) $ (90)
========= =========
Basic and diluted loss per common share from:
Continuing operations $ (0.17) $ (0.10)
Discontinued operations
--------- ---------
Loss per common share $ (0.17) $ (0.10)
========= =========
Shares used in computing per share amounts for basic and
diluted loss per common share 1,200 945
========= =========
See Notes to Consolidated Financial Statements.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts)
Unaudited
March 31, December 31,
2003 2002
----------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,127 $ 1,426
Short-term investments, at fair value 722 664
--------- ---------
Total cash and short-term investments 1,849 2,090
Trade accounts receivable, net 494 470
Inventories 556 559
Deferred income taxes 323 296
Other accounts receivable 140 358
Prepaid expenses and other current assets 58 52
--------- ---------
Total current assets 3,420 3,825
Restricted cash and investments 82 82
Investments 773 769
Property, net 3,576 3,705
Goodwill 1,721 1,715
Other intangible assets, net 205 213
Deferred income taxes 1,018 887
Other assets 202 210
--------- ---------
Total Assets $ 10,997 $ 11,406
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Loans payable $ 145 $ 204
Accounts payable 299 339
Other accrued liabilities 1,115 1,137
--------- ---------
Total current liabilities 1,559 1,680
Long-term debt 3,710 3,963
Postretirement benefits other than pensions 609 617
Other liabilities 512 396
Commitments and contingencies
Minority interests 19 59
Shareholders' equity:
Preferred stock - Par value $100.00 per share; Shares authorized: 10 million
Series C mandatory convertible preferred stock - Shares issued: 5.75 million;
Shares outstanding: 1.55 million 155 155
Common stock - Par value $0.50 per share; Shares authorized: 3.8 billion;
Shares issued: 1,267 million 634 634
Additional paid-in capital 9,671 9,695
Accumulated deficit (5,126) (4,921)
Treasury stock, at cost: 61 million; 70 million (613) (702)
Accumulated other comprehensive loss (133) (170)
--------- ---------
Total shareholders' equity 4,588 4,691
--------- ---------
Total Liabilities and Shareholders' Equity $ 10,997 $ 11,406
========= =========
Certain amounts for 2002 were reclassified to conform with 2003 classifications.
See Notes to Consolidated Financial Statements.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
For the three months ended
March 31,
--------------------------
2003 2002
--------- ---------
Cash flows from operating activities:
Loss from continuing operations $ (205) $ (98)
Adjustments to reconcile loss from continuing operations
to net cash provided by (used in) operating activities:
Amortization of purchased intangibles 9 11
Depreciation 118 157
Asbestos settlement 298
Restructuring, impairment and other charges and credits 51
Gain on repurchases of debt, net of inducements (4)
Undistributed earnings of associated companies 1 23
Minority interests, net of dividends paid (37) (6)
Deferred tax benefit (178) (87)
Interest expense on convertible debentures 7 10
Restructuring payments (94) (58)
Increases in restricted cash (3)
Income tax refund 191
Changes in certain working capital items:
Trade accounts receivable (13) (26)
Inventories 7 1
Other current assets 10 34
Accounts payable and other current liabilities, net of restructuring payments (118) (154)
Other, net (17) (9)
-------- -------
Net cash provided by (used in) operating activities 23 (202)
-------- -------
Cash flows from investing activities:
Capital expenditures (55) (101)
Net proceeds from sale of precision lens business 9
Net proceeds from sale or disposal of assets 13 5
Short-term investments - acquisitions (428) (603)
Short-term investments - liquidations 369 919
Restricted investments - liquidations 3
Other, net 1
-------- -------
Net cash (used in) provided by investing activities (88) 220
--------- -------
Cash flows from financing activities:
Net repayments of loans payable (62) (143)
Proceeds from issuance of long-term debt 11
Repayments of long-term debt (189) (4)
Proceeds from issuance of common stock, net 3 15
Cash dividends paid to preferred shareholders (3)
-------- -------
Net cash used in financing activities (251) (121)
-------- -------
Effect of exchange rates on cash 17 (6)
-------- -------
Cash used in continuing operations (299) (109)
Cash provided by discontinued operations 30
-------- -------
Net decrease in cash and cash equivalents (299) (79)
Cash and cash equivalents at beginning of period 1,426 1,037
-------- -------
Cash and cash equivalents at end of period $ 1,127 $ 958
======== =======
Certain amounts for 2002 were reclassified to conform with 2003 classifications.
See Notes to Consolidated Financial Statements.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
SEGMENT RESULTS
(Unaudited; in millions)
Telecom- Non-segment/ Consolidated
munications Technologies Other items Total
----------- ------------ ------------ ------------
For the three months ended March 31, 2003
Net sales $ 352 $ 388 $ 6 $ 746
Research, development and engineering expenses $ 38 $ 55 $ 93
Restructuring, impairment and other (credits) charges $ (9) $ 60 $ 51
Interest expense $ 21 $ 19 $ 40
Benefit for income taxes $ (25) $ (7) $ (112) $ (144)
Loss before minority interests and equity (losses)
earnings $ (60) $ (55) $ (186) $ (301)
Minority interests 37 37
Equity in (losses) earnings of associated companies (3) 44 18 59
-------- -------- -------- -------
Net (loss) income $ (63) $ 26 $ (168) $ (205)
======== ======== ======== =======
For the three months ended March 31, 2002
Net sales $ 465 $ 369 $ 5 $ 839
Research, development and engineering expenses $ 86 $ 40 $ 126
Interest expense $ 32 $ 16 $ 48
(Benefit) provision for income taxes $ (64) $ (1) $ 15 $ (50)
(Loss) income before minority interests and equity
(losses) earnings $ (138) $ (4) $ 8 $ (134)
Minority interests 6 6
Equity in (losses) earnings of associated companies (4) 33 1 30
Income from discontinued operations 8 8
-------- -------- -------- -------
Net (loss) income $ (142) $ 35 $ 17 $ (90)
======== ======== ======== =======
Non-segment/other items net (loss) income is detailed below:
Three months ended
March 31,
--------------------------
2003 2002
-------- ---------
Non-segment income (loss) and other (1) $ (12) $ 9
Interest income 8 14
Asbestos settlement (298)
Gain on repurchases of debt, net of inducements 4
Benefit (provision) for income taxes 112 (15)
Equity in earnings of associated companies (2) 18 1
Income from discontinued operations 8
-------- ---------
Net (loss) income $ (168) $ 17
======== =========
(1) Includes non-segment operations and other corporate activities.
(2) Includes amounts derived from corporate investments and activities,
primarily Dow Corning Corporation - $17 million.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Restructuring, Impairment and Other Charges and Credits
In the first quarter of 2003, Corning recorded charges for the shut-down of the
conventional video components business and the optical switching product line
which were announced on April 15, 2003 and February 13, 2003, respectively.
Corning also recorded credits related to the restructuring reserve discussed
below.
Conventional video components business
Corning Asahi Video Products Company, a 51% owned consolidated subsidiary,
(conventional video components business, or CAV), is a manufacturer of glass
panels and funnels for use in conventional tube televisions and is reported in
the Technologies segment.
On April 15, 2003, Corning announced that it had agreed with its partner to
cease production. Corning impaired the long-lived assets of this business to
estimated salvage value and recorded a charge of $62 million, ($19 million
after-tax and minority interest). Restructuring costs are expected to be
recorded in the second quarter and total $80 million to $110 million ($20
million to $35 million after-tax and minority interest). Corning expects the
restructuring costs to require $40 million to $65 million in cash spending.
Corning has agreed with its partner to a shared funding arrangement based on
proportional partnership interests.
Optical Switching
Corning recorded a charge of $17 million associated with the discontinuance of
the optical switching product line in the photonic technologies business due to
the downturn in the telecommunications industry. In addition to the first
quarter charges, Corning expects to record charges of $10 million in the second
quarter for certain exit costs.
Impairment of Cost Investments
In the first quarter, Corning recorded a $5 million ($3 million after-tax)
charge for other than temporary declines in certain investments accounted for
under the cost method in the Telecommunications segment.
Credits
The current restructuring reserve continues to be evaluated as plans are being
executed. As a result, there may be additional charges or reversals. In
addition, since the restructuring program is an aggregation of many individual
plans currently being executed, actual costs have differed from estimated
amounts. During the first quarter, Corning recorded credits of $33 million
related to revised cost estimates of existing restructuring plans of which $24
million related to employee separation and exit costs, while $9 million related
to adjustments to assumed salvage values of assets that were previously
impaired.
2. Asbestos Settlement
On March 28, 2003, Corning announced that it had reached agreement with the
representatives of asbestos claimants for the settlement of all current and
future asbestos claims against Corning and Pittsburgh Corning Corporation (PCC),
which might arise from PCC products or operations.
The agreement is expected to be incorporated into a settlement fund as part of a
reorganization plan for PCC. The plan will be submitted to the federal
bankruptcy court in Pittsburgh for approval, and is subject to a favorable vote
by 75 percent of the asbestos claimants voting on the PCC reorganization plan.
Corning will make its contributions to the settlement trust under the agreement
after the plan is approved and no longer subject to appeal. The approval process
could take one year or longer.
Corning's settlement will require the contribution, when the plan becomes
effective, of Corning's equity interest in PCC, its one-half equity interest in
Pittsburgh Corning Europe N.V. (PCE), a Belgian corporation, and 25 million
shares of Corning common stock. Corning also will make cash payments with a
current value of $130 million over six years beginning in June 2005. In
addition, Corning will assign insurance policy proceeds from its primary
insurance and a portion of its excess insurance as part of the settlement.
Corning recorded a charge of $298 million ($192 million after-tax) in the first
quarter. The carrying value of Corning's stock in PCE and the fair value as of
March 31, 2003, of 25 million shares of Corning common stock have been reflected
in current liabilities. The remaining $130 million, representing the net present
value of the cash payments, discounted at 5.5%, is recorded in noncurrent
liabilities. Any changes in the value of Corning's common stock contribution
will need to be recognized in Corning's quarterly results through the date of
contribution to the settlement trust.
3. Gain on Repurchases of Debt, Net of Inducements
During the first quarter of 2003, Corning repurchased and retired 298,500 zero
coupon convertible debentures with an accreted value of $231 million in exchange
for cash of $189 million in a series of open-market repurchases. Also in the
first quarter Corning issued 6.5 million shares of treasury common stock in
exchange for zero coupon convertible debentures with an accreted value of $43
million. Corning recorded a net gain of $4 million ($3 million after-tax)
associated with retirements of its zero coupon convertible debentures in the
first quarter. The increase in equity due to the issuance of shares from
treasury stock was $77 million.
4. Income Tax
In the first quarter of 2003, the effective tax benefit rate excluding certain
items such as restructuring, impairment, asbestos settlement and debt
transactions was 30%.
CORNING INCORPORATED
QUARTERLY SALES INFORMATION
(In millions)
2003
-------------------------------------------------------------
Q1 Q2 Q3 Q4 Total
-------- -------- ------- ------- --------
Telecommunications
Fiber and cable $ 193 $ $ $ $ 193
Hardware and equipment 122 122
Photonic technologies 18 18
Controls and connectors 19 19
-------- -------- ------- ------- --------
Segment net sales $ 352 $ $ $ $ 352
======== ======== ======= ======= ========
Technologies
Display technologies $ 117 $ $ $ $ 117
Environmental 115 115
Life sciences 73 73
Conventional video components 25 25
Other technologies businesses 58 58
-------- -------- ------- ------- --------
Segment net sales $ 388 $ $ $ $ 388
======== ======== ======= ======= ========
2002
-------------------------------------------------------------
Q1 Q2 Q3 Q4 Total
-------- -------- ------- ------- --------
Telecommunications
Fiber and cable $ 255 $ 212 $ 195 $ 197 $ 859
Hardware and equipment 135 153 136 128 552
Photonic technologies 36 39 17 19 111
Controls and connectors 39 33 18 19 109
-------- -------- ------- ------- --------
Segment net sales $ 465 $ 437 $ 366 $ 363 $ 1,631
======== ======== ======= ======= ========
Technologies
Display technologies $ 93 $ 102 $ 106 $ 104 $ 405
Environmental 94 102 102 96 394
Life sciences 70 74 71 65 280
Conventional video components 43 41 47 35 166
Other technologies businesses 69 66 66 67 268
-------- -------- ------- ------- --------
Segment net sales $ 369 $ 385 $ 392 $ 367 $ 1,513
======== ======== ======= ======= ========
The above supplemental information is intended to facilitate analysis of
Corning's businesses.
Exhibit 99.2
FOR RELEASE -- APRIL 24, 2003
Media Relations Contact: Investor Relations Contact:
Monica L. Ott Kenneth C. Sofio
(607) 974-8769 (607) 974-7705
ottml@corning.com sofiokc@corning.com
Corning Chairman tells Shareholders:
"We are Succeeding"
After challenging time, sees a bright future for Corning
CORNING, N.Y. -- A year after returning to the helm, Corning Incorporated's
(NYSE:GLW) Chairman and CEO, James R. Houghton, today told shareholders that the
company is succeeding with its plan to return to profitability.
"Last year, I told you that we, as a company, were up to the challenge before
us. I told you that we would focus our priorities in three very distinct areas;
that we would dedicate all our energies toward preserving our financial health,
toward returning to profitability, and toward investing in our future...I told
you that in all these areas we would succeed. My friends, one year later, we are
succeeding," Houghton said.
Houghton's remarks were part of his annual address to more than 500 shareholders
assembled for the company's annual meeting in Corning, N.Y. He thanked the
audience for their confidence and support in the company and presaged Corning's
promising future, "As the economy recovers and the business world begins to look
around to see who's still standing, they'll see Corning because we have
continued to believe we had a future and we have taken steps so it will be a
bright one."
Financial health and profitability
Houghton pointed out that the company's first-quarter results were break even,
excluding one-time charges, "and our first quarter operating cash flow was
positive." He praised management's efforts at reducing costs and eliminating
slightly more than $1 billion in debt over the past 15 months.
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Corning Chairman tells Shareholders: "We are Succeeding"
Page Two
The chairman also outlined the company's progress toward its goal of returning
to operating profitability, highlighting its broad and diverse business
portfolio as a source of strength. "The two keys to our return to profitability
will be the cost reduction from last year's restructuring and the momentum from
businesses in what we call our Corning Technologies segment," he said. In
particular, Houghton noted that the liquid-crystal display business, which
creates the glass used in flat panel desktop computers, notebook computers and
the new LCD televisions are beginning to revolutionize the communications
industry. Houghton also said Corning's environmental products business is well
positioned for continued global growth in both the automotive and diesel
markets.
Houghton reaffirmed Corning's commitment to optical communications and said that
the company expects growth of its telecommunications business to return over
time.
He also told shareholders that the company is monitoring external trends across
all of its markets, "...the timing of our recovery is affected, in great
measure, by how the economy recovers in the wake of the war in Iraq. If world
events continue to put a drain on consumer confidence, on our business
expansions and on the general economy, both here and around the world, we will
be affected too."
Investing in the future
Houghton reminded shareholders of the company's continued commitment to
innovation, "And while we have dealt with our current day business challenges,
we have continued to keep a steady eye on our future...today we are broadening
our presence in exciting industries where we are already leaders." Among the
areas he highlighted were new ways of making flat panel glass, new technologies
in the diesel emission control market, new properties for producing optical
fiber and improved processes to enable new generations of drug discovery.
Looking ahead Houghton said that while the company may continue to face
challenging times, it will not change its three focus areas. "We firmly believe
in the plan we have charted for ourselves and we will pursue it relentlessly,
because it will pay off."
In other business, shareholders re-elected the following directors: James B.
Flaws, vice chairman and chief financial officer, Corning Incorporated; James R.
Houghton, chairman and chief executive officer, Corning Incorporated; Jeremy R.
Knowles, Amory Houghton professor of chemistry and biochemistry, Harvard
University; James J. O'Connor, retired chairman of the board and chief executive
officer, Unicom Corporation; Deborah D. Rieman, retired president and chief
executive officer, Check Point Software Technologies, Incorporated; and Peter F.
Volanakis, president of Corning Technologies, Corning Incorporated.
(more)
Corning Chairman tells Shareholders: "We are Succeeding"
Page Three
Shareholders also approved the 2003 variable compensation plan, which is
designed to provide a competitive incentive opportunity to attract and retain
key executives; the 2003 equity plan for non-employee directors, which is
designed to assist Corning in attracting and retaining highly qualified board
members; and the amendment of the 2000 employee equity participation program,
which permits employees to obtain equity ownership in Corning.
About Corning Incorporated
Established in 1851, Corning Incorporated (www.corning.com) creates leading-edge
technologies that offer growth opportunities in markets that fuel the world's
economy. Corning manufactures optical fiber, cable and photonic products in its
Telecommunications segment. Corning's Technologies segment manufactures
high-performance display glass, and products for the environmental, life
sciences, and semiconductor markets.
Webcast Information
The company will host a live audio webcast of the 2003 annual meeting of
shareholders in Corning, N.Y., available from 11 a.m. to 12:15 p.m. ET, April
24, 2003. To access the webcast, go to http://www.corning.com and click on the
webcast icon. No password or registration is required. The webcast will be
archived on the Web site for 14 days after the broadcast.
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements that involve a variety of
business risks and other uncertainties that could cause actual results to differ
materially. These risks and uncertainties include the possibility of changes or
fluctuations in global economic conditions; currency exchange rates; product
demand and industry capacity; competitive products and pricing; availability and
costs of critical components and materials; new product development and
commercialization; order activity and demand from major customers; capital
spending by larger customers in the telecommunications industry and other
business segments; the mix of sales between premium and non-premium products;
possible disruption in commercial activities due to terrorist activity and armed
conflict; ability to obtain financing and capital on commercially reasonable
terms; acquisition and divestiture activities; the level of excess or obsolete
inventory; the ability to enforce patents; product and components performance
issues; and litigation. These and other risk factors are identified 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.
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