Corning Incorporated (NYSE: GLW) today announced the next phase in
its long-term relationship with Samsung Display Co., Ltd., a
leading display technologies innovator.
Samsung Display has been an investor in Corning since 2014, when
it received preferred shares – convertible after seven years and
equivalent to an approximately 7.5% ownership stake – as part of a
series of strategic and financial agreements that resulted in
Corning acquiring full ownership of Samsung Corning Precision
Materials, Co., Ltd. The agreements benefitted both companies’
shareholders. Financial and strategic benefits to Corning included
full control of its global fusion-glass manufacturing platform,
greater flexibility in asset use, greater operational efficiencies,
and increased options to pursue precision-glass opportunities.
Following the seven-year anniversary of the agreements, and with
the Corning common dividend exceeding the preferred dividend,
Samsung Display will convert all of its preferred shares to common,
which represents approximately 13% of Corning’s common shares on an
as-converted basis.
“Corning is a great partner and we are pleased to have an
opportunity to strengthen and extend our nearly 50-year
relationship,” Joo-Sun Choi, president and chief executive officer
of Samsung Display, said. “Our latest seven-year commitment
reaffirms Samsung’s confidence in the value of Corning’s
capabilities, our ongoing technology collaborations, and our
combined innovation leadership.”
Based on Samsung Display’s continued confidence in Corning, and
the strong performance of its original investment, the two
companies will enter into a new agreement for another seven
years.
- Samsung Display will convert all of its preferred shares to 115
million common shares.
- Corning will repurchase 35 million of those common shares,
resulting in Samsung Display having an ownership stake of
approximately 9%.
- The initial repurchase of common shares is expected to close in
April 2021 and will immediately reduce Corning’s fully diluted
share count by 35 million shares, or about 4%.
- Samsung Display will maintain its ownership stake in Corning
until at least 2028.
“From the early days of CRT, to LCD, to more recent
collaborations on OLED, QD Display, and flexible displays, we’re
proud to be the key material innovation partner to Samsung,” said
Wendell P. Weeks, Corning’s chairman and CEO. “We are honored by
Samsung Display’s vote of confidence to remain a significant
shareholder for another seven years.”
Corning Resumes Share Repurchases
Corning has consistently demonstrated its long-term commitment
to rewarding shareholders through dividends and share repurchases.
Since the original transactions in 2014 with Samsung Display,
Corning has reduced diluted shares by more than 40%, and its Board
of Directors has increased the quarterly dividend per share by
140%. This transaction marks the resumption of share repurchases by
the company.
Tony Tripeny, Corning’s executive vice president and chief
financial officer, said, “Outstanding execution and the
effectiveness of our ‘more Corning’ strategy put us in a strong
position. We’re confident in our future performance and cash
generation potential and pleased to resume share buy backs.
Repurchasing 4% of our shares through this transaction is a great
start. Additionally, the agreement allows payment for the
repurchase over two years, providing us with flexibility.
“The transaction eliminates the entire class of preferred
shares, improves our capital structure, is accretive to EPS, and
reduces our aggregate dividend commitment. We’ve seized a great
opportunity for the company and for our shareholders,” Tripeny
continued.
Caution Concerning Forward-Looking
StatementsThe statements contained in this release that
are not historical facts or information and contain words such as
“will,” “believe,” “anticipate,” “expect,” “intend,” “plan,”
“seek,” “see,” “would,” and “target” and similar expressions are
forward-looking statements. These forward-looking statements are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and include estimates and
assumptions related to economic, competitive and legislative
developments. Such statements relate to future events that by their
nature address matters that are, to different degrees,
uncertain. These estimates are subject to change and
uncertainty which are, in many instances, beyond our control. There
can be no assurance that future developments will be in accordance
with management’s expectations. Actual results could differ
materially from those expected by us, depending on the outcome of
various factors. We do not undertake to update forward-looking
statements.
Although the Company believes that these forward-looking
statements are based upon reasonable assumptions regarding, among
other things, current estimates and forecasts, general economic
conditions, its knowledge of its business, and key performance
indicators that impact the Company, actual results could differ
materially. The Company does not undertake to update
forward-looking statements. Some of the risks, uncertainties
and other factors that could cause actual results to differ
materially from those expressed in or implied by the
forward-looking statements include, but are not limited to: the
duration and severity of the COVID-19 pandemic, and its ultimate
impact across our businesses on demand, operations and our global
supply chains; the effects of acquisitions, dispositions and other
similar transactions; global business, financial, economic and
political conditions; tariffs and import duties; currency
fluctuations between the U.S. dollar and other currencies,
primarily the Japanese yen, new Taiwan dollar, euro, Chinese yuan
and South Korean won; 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;
the amount and timing of our cash flows and earnings and other
conditions, which may affect our ability to pay our quarterly
dividend at the planned level or to repurchase shares at planned
levels; possible disruption in commercial activities due to
terrorist activity, cyber-attack, armed conflict, political or
financial instability, natural disasters, or major health concerns;
loss of intellectual property due to theft, cyber-attack, or
disruption to our information technology infrastructure;
unanticipated disruption to equipment, facilities, IT systems or
operations; effect of regulatory and legal developments; ability to
pace capital spending to anticipated levels of customer demand;
rate of technology change; ability to enforce patents and protect
intellectual property and trade secrets; adverse litigation;
product and components performance issues; retention of key
personnel; customer ability, most notably in the Display
Technologies segment, to maintain profitable operations and obtain
financing to fund ongoing operations and manufacturing expansions
and pay receivables when due; loss of significant customers;
changes in tax laws and regulations including the 2017 Tax Cuts and
Jobs Act; the impacts of audits by taxing authorities; the
potential impact of legislation, government regulations, and other
government action and investigations; and other risks detailed in
Corning’s SEC filings.
For a complete listing of risks and other factors, please
reference the risk factors and forward-looking statements described
in our annual reports on Form 10-K and quarterly reports on Form
10-Q.
Web 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 uses 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, or
supplemental to information contained in this or other press
releases. 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 IncorporatedCorning
(www.corning.com) is one of the world's leading innovators in
materials science, with a 170-year track record of life-changing
inventions. Corning applies its unparalleled expertise in glass
science, ceramic science, and optical physics along with its deep
manufacturing and engineering capabilities to develop
category-defining products that transform industries and enhance
people's lives. Corning succeeds through sustained investment in
RD&E, a unique combination of material and process innovation,
and deep, trust-based relationships with customers who are global
leaders in their industries. Corning's capabilities are versatile
and synergistic, which allows the company to evolve to meet
changing market needs, while also helping our customers capture new
opportunities in dynamic industries. Today, Corning's markets
include optical communications, mobile consumer electronics,
display, automotive, and life sciences.
Media Relations
Contact: Holly
Gilthorpe
(607)
974-2782
gilthorphl@corning.com
Investor Relations Contact: Ann H.S. Nicholson
(607) 974-6716 nicholsoas@corning.com
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