The multimillion-dollar contracts have been rolling in for Ceradyne Inc., thanks in large part to the prolonged war in Iraq.
Costa Mesa-based Ceradyne makes bulletproof vest inserts for soldiers as well as armor patches for military vehicles. The products are made of lightweight, hardy ceramics.
Even before the Iraq war, Ceradyne saw lofty growth amid increased military spending.
The company’s sales for the 12 months ended June 30 were $136 million, up 195% since June 2001.
Heady growth in the past year helped bump up Ceradyne to No. 9 on this year’s Business Journal list of fastest-growing companies, up from No. 26 last year.
Ceradyne is up on several counts.
Net income for the second quarter tripled to $6.5 million from a year earlier, beating expectations.
Sales for the quarter were up 77% to $39.2 million.
Ceradyne’s backlog as of June 30 was $96 million, up from $43 million a year earlier.
The company’s workforce in Costa Mesa and Irvine is up 120% from a year ago to 729 people. Companywide, Ceradyne’s employment is up 231% in the past year to nearly 1,600 people.
On Wall Street, the company’s shares have doubled this year. As of last week, Ceradyne counted a market value of $740 million.
In August, Ceradyne won a Pentagon body armor supply contract that could be worth $460 million over three years.
Last month, the company won a separate five-year deal with the Marine Corps to provide up to $42 million worth of body armor.
About $3.2 million of the gear is set to be shipped in the next six months.
Even if fighting slows in Iraq and Afghanistan, Ceradyne is betting on continued growth with the military.
Bulletproof vests are standard issue for soldiers, while the Pentagon could look to overhaul tanks and other vehicles with lighter ceramics.
Rivals include ArmorWorks Inc. of Phoenix and Jacksonville, Fla.-based Armor Holdings Inc.
Next month Ceradyne plans to open an office in Wixom, Mich., as part of a bid to design a bulletproof, non-combat vehicle. The company hopes to sell the vehicle to the Pentagon.
At the same time, Ceradyne is looking to diversify.
“We are not a defense company,” Chief Executive Joel Moskowitz said in an interview earlier this year. “The bulk of the revenue is from armor, clearly. But the company perceives itself as an advanced technical ceramics company.”
In some cases, Ceradyne is looking to leverage its work for the military in going after new markets.
Next year the company said it plans to come out with an armored Lincoln Town Car for Ford Motor Co.
The car is set to cost about $145,000 and is aimed at heads of state and other government officials, according to Ceradyne.
Rivals in the armored car market include Largo, Fla.-based Armet Armored Vehicles Inc., which already makes fortified models.
Kentucky Expansion
Ceradyne also makes parts for diesel truck engines. Earlier this year, the company expanded operations in Lexington, Ky., where it now has 150,000 square feet of production space to make truck parts.
Ceradyne also makes ceramic brackets for dental braces under a production and marketing pact with Unitek, a 3M Co. unit. Ceradyne produces the dental products at its 41,000-square-foot Irvine plant.
In August, Ceradyne paid $142 million to buy ESK Ceramics, a unit of Germany’s Wacker-Chemie GMBH.
ESK makes “evaporation boats”,the metallic material that lines the insides of bags of chips and other products and keeps the contents fresh. ESK also supplies the boron carbide that Ceradyne uses in its ceramic products.
About 65% of Ceradyne’s business is related to defense, compared to 2.5% at ESK.
In May, Ceradyne bought Quest Technology of San Diego, a small technical ceramic company, for $2.5 million. Quest’s products are used in medical instruments and electronics.
