News
Sales for the quarter climbed 35% to $48.6 million while net earnings jumped 33% to $5.2 million.
In a statement president and CEO Ronald M. Moquist said that the company's Engineered Films division was "the big driver" in the just-concluded quarter, shipping approximately $4 million in reinforced plastic sheeting to hurricane-damaged parts of the U.S.
The company's Electronic Systems Division's sales climbed 34% to $14 million while operating income was up 2% to $1.6 million. "We saw steady improvement in operating efficiencies and throughput during the third quarter but this division still has room to improve profitability," Moquist said.
For the past nine months, ESD's sales were $34.8 million, up 8%, and operating income totaled $3.1 million, down 28% from the nine months a year earlier.
BOSTON, Nov. 17 -- When Ray Sharpe abruptly stepped down as chief executive of Cookson Electronics last May, it opened a huge cans of worms over who was next in line to run one of the world's largest suppliers of electronics assembly materials. Sharpe's departure (he is now chief executive of Isola) was just one of a string of top-level changes: Stephen Howard, chairman of Cookson Group, Cookson Electronics' parent company, had already announced plans to retire.
It took some months, but the pieces are being put back together. One question was addressed in July, when Nick Salmon was named the new chairman. And another was answered in October, as the company promoted Steve Corbett, head of its wildly successful specialty chemistries division, to the top spot.
Since 2002 Corbett has headed Enthone, the $450 million chemicals business Cookson acquired in 2000. In past 12 months, the division's operating profit improved 60%, and return on sales doubled to 13%, from 6% in 2002. Corbett is a Cookson veteran, having previously managed its semiconductor packaging materials and Alpha Metals divisions. (He was also general manager of Heraeus Cermalloy Inc. in the 1980s.) Still, he has his work cut out as he tries to rearrange Cookson Electronics, a $786 million division in 2003 that also includes Polyclad Technologies. In October he spoke with Circuits Assembly's Mike Buetow. Excerpts.
CA: Why do you think you were tapped for this job?
SC: [Laughs] You'll have to ask my boss [Cookson Group chairman] Nick Salmon. My slant is, the process that Cookson Group went through was fairly long. They looked at both internal and external candidates. The decision to bring in an insider was one part of the requirement to have someone who was familiar with the businesses, in order to shorten the learning curve. That, and there is always a desire to promote from within. As far as why me among the internal candidates probably has more to do with the performance of the Enthone business. It has improved significantly in very, very difficult market conditions. This year, the markets are picking up and it's doing even better.
CA: Why has Enthone performed so well?
SC: Enthone has gotten healthier through organizational changes. I structured the business under a global structure, which allowed us to focus efforts in R&D on the right markets, the right regions, and the right products, as opposed to parochial R&D organizations that were focused on the U.S. and Europe. Now we're launching more products per unit of time and taking those products into high growth areas like Asia much more quickly.
CA: Your predecessor, Ray Sharpe, was following a one-stop shopping strategy. The announcements, with Polyclad having a direct line to Nick Salmon, suggest a different approach.
SC: There's a lot of discussion over Polyclad and I wouldn't read too much into that. The reality behind the laminates business reporting to Nick, if you look at the financial analyst community and you didn't know better you would conclude that the only thing Cookson has is laminates. Precious Metals, Ceramics - our other businesses - get very little press. There's this fever over [Polyclad]. To answer the analysts, Nick felt he needed to have firsthand knowledge of what was going on, and firsthand influence over the business. He felt he wouldn't be comfortable talking to the financial community if he didn't walk the talk. This period where Nick will manage it will not be one of long duration. As for the one-stop shopping, we're going to do what our customers value. I'm not going to say that none of our customers value it, but I will say that's not a common thread in our marketplace. Our customers want the best technology, at the best price point. That's not always Cookson's strong point where it touches the customer. That's probably the fundamental difference between our philosophies: I'm not going to push it where it doesn't fit.
CA: So will we see changes to sales and distribution?
SC: Probably no specific changes in sales and distribution. For board fabrication, for example, Enthone is the sales arm for Alpha products like solder for HASL. Alpha makes them, Enthone sells them; [Enthone is] the touch point for that market. In some parts of the world, Enthone sells laminate because it's the proper customer base. Much of business is relationship driven, and so we want to build on that when it's there.
CA: Jason Maupin, speaking at TMRC in October, advocated the principles of TASTE - truth accountability, support, trust, enthusiasm. Is this a mantra at Enthone, and will it be worked into the broader Cookson Electronic culture?
SC: It is one of the principles of Enthone. I think we've got good businesses. We need something like that to show people they are working for a top-shelf organization.
CA: Who will succeed you at Enthone?
SC: [Laughs] Are you looking for a job? We just started the succession process. We have a number of candidates. I hope I have enough internal candidates.
CA: Are any other changes expected in the management ranks, at Alpha or Polyclad?
SC: No short-term plans.
CA: Is Polyclad being packaged for a possible sale?
SC: It's no secret that the laminates business is hurting. Polyclad is doing well in Asia. We're treading water in Europe and suffering in the U.S. That business needs to be fixed. I would put the prospects of a sale as pretty low. Cookson doesn't have the appetite to take another haircut like they did on Speedline. Everything is for sale at the right price, of course. If someone offered us $1 billion for Polyclad, it would be looked at.
CA: What's your top priority right now?
SC: We're in the middle of our budgeting process for 2005. I worked at Alpha and am comfortable in assembly materials space. Even though Polyclad reports to Nick, I'll handle the budgeting process for Polyclad. Also, I'll travel the world of Cookson, listening to employees and customers and trying to develop a plan. I certainly want to go back and touch ground zero and reassure myself that the existing strategic plans are sensible and I can see where the lines intersect between customers and our plans.
There were 14 M&A deals finalized in Q3, reports Lincoln Partners, a Chicago-based investment bank. This exceeds the 13 deals completed in the June quarter and 12 in the March quarter.
It was the most third-quarter transactions since 2000, when 28 deals were completed, Lincoln Partners said. There were 10 deals done in Q3 2003.
Companies of over $3 billion in annual revenues accounted for half the completed transactions. The other half were conducted by firms with revenues under $400 million, Lincoln Partners said.
Among the major deals:
- Flextronics agreed to buy Nortel's manufacturing operations.
- Creation Technologies acquired EMS firm Second Source System.
- SigmaTron bought the remaining 57.5% of SMT Unlimited.
- Celestica sold its Power Syetems business.
- Neways Electronics acquired Stork Electronics.
- Flextronics purchased Sheldahl, a maker of flex laminate and PCBs.
For the past three years Dunne has been a sell-side analyst with RBC Capital, an investment banking firm. He came to fame as a managing director of Robertson Stephens in the 1990s, a firm that fueled scores of high-tech companies and handled dozens of mergers and acquisitions. Robertson Stephens later collapsed and was sold.
Often cited by Wall Street publications for his accuracy, Dunne was in 2001 voted an Atomic Giant by PC FAB magazine (now PCD&M) in recognition of his influence on the industry.
In a statement today, Dunne said thanked the industry. "I immensely enjoyed watching the electronics manufacturing products and services industry take shape and am thankful for the opportunity I had to participate in its growth and development through strategic talks with many of you, and by educating investors on the investment merits of the EMPS industry."
Dunne gave a promising forecast for the future. "I believe the EMPS industry should continue to outperform the overall Nasdaq and a group of leading technology hardware companies for several more years.
Since Dunne initiated coverage in mid 1996:
- Quarterly sales have grown from $4 billion to $15.2 billion, a CAGR of 36%.
- Over 400 OEM asset divestitures and business acquisitions have been completed.
- Market capitalization has increased from $6.5 billion to $30.5 billion, a CAGR of 20% vs. 7% for the Nasdaq..
Amit Daryanani will take over Dunne's practice at RBC.
Besi will assume 100% of Datacon's shares. Datacon shareholders will receive 90% cash and shares in Besi. The purchase price was 3 million euros and includes net financial liabilities.
Negotiations are in the final stages, the companies said, and the merger is scheduled to close in January, pending antitrust and other reviews. Besi is listed on Nasdaq and Euronext. After the close, Datacon will become an wholly owned subsidiary of Besi.
Datacon makes microchip assembly platforms (die bonders), while Besia manufactures semiconductor assembly equipment.
Under the agreement, SolderMask will manufacture VectorGuard stencils from foil blanks supplied by DEK and will also provide complementary frames.
CHANDLER, Ariz., Nov. 8 — Microchip Technology, a provider of microcontroller and analog semiconductors, will in January convert its product packaging to lead-free plating, to comply with pending government regulations.
The company has selected matte tin as its plating material. The finish makes the company's products compatible with tin-lead soldering processes and higher-temperature lead-free processes.
The company has been shipping parts with matte tin plating in volume for over a year, Microchip said.
A number of semiconductor suppliers have announced plans to convert their line cards by the end of the first quarter 2005. See the story in the December issue of Circuits Assembly, coming soon.
CTS will pay between $14.20 and $15 per share, 75% in cash and 25% in CTS common stock, for SMTEK. CTS will also assume about $15 million in outstanding debt of SMTEK. Shares of SMTEK closed yesterday at $2.41 and the company's 52-week high is $7.50.
The acquisition is subject to shareholder approval and is expected to close in the first quarter 2005.
Upon completion of the deal, SMTEK will merge with CTS' EMS business unit, Interconnect Systems. The combination is expected to significantly expand the operational footprint, customer base, and capabilities of both businesses in the EMS market. The companies had combined revenues of about $625 million over the past 12 months.
In a press statement SMTEK chairman James Burgess said, "This acquisition ... recognizes [SMTEK's] achievement in emerging as a successful, effectively managed business with a strong competitive presence in the EMS industry. We feel the result will be significant business and financial benefits for both companies."
Elkhart, IN based CTS had revenues of $521 million over the past 12 months. SMTEK had sales of $102.4 million and operating earnings of $4 million
The companies will hold a conference call today at 1:30 p.m. Eastern: 800-762-6067 (480-629-9566, if calling from outside the U.S.). No access code is needed.
In a research report released today, Deutsche Bank said, "We have become more optimistic about Sanmina`s longer-term strategy, but believe the company must clear several near- and long-term hurdles before it warrants a premium valuation to its peers. Most importantly, we believe Sanmina`s short-term margin targets will prove aggressive."
Sanmina-SCI has set a goal of 10% revenue growth for fiscal 2005, a target DB calls "achievable." The investment bank "continues to question" Sanmina-SCI's margin forecasts, however, saying "management`s forecasts for its components business are particularly aggressive."
Sanmina-SCI cut its revenue estimates from original design manufacturing (ODM) services to $150 million to $200 million next year. Last year, the company forecast ODM sales would be $500 million by 2005.
The trade group is basing its findings on a recent RoHS/lead-free summit at which scores of company's traded insights on the European Union's Restriction on Use of Certain Hazardous Substances and Waste from Electrical and Electronic Equipment (WEEE) directives.
The meetings were held October 18-20 and drew close to 190 people.
One primary concern: how companies will be able to prove compliance -- to regulatory bodies and to their customers. The directives are not explicit on this point, and the EU's Technical Adaptation Committee, responsible for providing guidance on RoHS implementation, has not yet made recommendations, NEMI said in a press statement.
Among the attendees' recommendations:
- Executive support is required for a successful company program.
- Each firm should appoint a project manager and develop an implementation plan that includes in-house efforts as well as supply base.
- Many major OEMs plan to convert to Pb-free solder and components during the first three quarters of 2005 for their consumer products (some are targeting the end of this year.)
- Much of the supply chain is prepared to support this conversion schedule.
- Many producers of high-end exempt products will convert to Pb-free components at the same time, and then convert to Pb-free solder at a later date.
- All major OEMs are requiring new part numbers for Pb-free components (in order to clearly differentiate "leaded" parts from Pb-free).
Breakout groups then explored potential areas of industry collaboration. Among the ideas:
- A 10-step "best practices" program that would help companies demonstrate due diligence to remove RoHS-banned substances from products.
- An industry-wide depository of component material data.
- Coordination between parallel efforts, and education on approaches/best practices.
- Processing and reliability of Pb-free and mixed-metal technology for high-end electronics (which are exempt from some of the directives' requirements).
Presentations from the summit and reports from the breakout groups are available at www.nemi.org/newsroom/Presentations/RoHS_summit.html.
Minneapolis, MN - The SMTA's Pan Pacific Microelectronics Symposium & Exhibit (smta.org/pan_pac/) will take place Jan. 25-27, 2005, at the Sheraton Kauai Resort in Kauai, HI. Kei Biu, of SMT Corp, will give the keynote presentation on Green Electronics in China.
The technical program will consist of sessions on 3-D Chip Stacking, System in Package (SiP), RF & Sensor Technologies, High Performance Packaging and Assembly Management Strategies.
Additional sessions will cover Pb-Free Reliability, Solder and Rework Processes, Pb-free Microstructures and Performance, Pb-free Implementation, Package Solder Joint Reliability and Electronic Adhesives, Chip Attach and Materials Technologies, Cleaning and Surface Treatments, Packaging and Assembly Trends, and Inspection and Test.
The event averages more than 100 participants annually from 15 different countries throughout Europe, the Americas and the Pacific Basin.
For more information, contact JoAnn Stromberg: 952-920-7682; joann@smta.org.
Endicott, NY -- Endicott Interconnect Technology was recently issued a patent to improve package reliability, its second since the company's formation in 2002.
In late October, EI received their first U.S. Patent (6,809,269) "Circuitized Substrate Assembly and Method of Making Same" - a multilayer printed circuit that uses conductive paste to form electrical connections between layers of the structure.
This was followed by the U.S. patent issued this week (6,815,837), "Electronic Package with Strengthened Conductive Pad" - an approach to strengthening the design of printed circuits to improve their reliability when assembled with components.
Endicott engineers have filed over 38 U.S. patent applications to date.
Press Releases
- Weller Tools Celebrates 80 Years of Innovation with Special Black Edition WE1010 and ZeroSmog Shield; Philippe Buidin Comments
- Saki America, Inc. Appoints Mario Ramírez Galindo as Project Engineer in Mexico; Craig Brown Comments
- BEST Inc to Host Soldering 101 Workshop at Illinois & Michigan Locations
- Incap Corporation: Incap's Annual and Sustainability Report 2024 published