CoorsTek is making the Coors family more money than its famous beer business. This Coors owned private company is the biggest engineered-ceramics manufacturer in the world with $1.25 billion in sales and an estimated cash flow margin of 27 percent. Many large American manufacturers buy CoorsTek parts including General Electric, IBM, General Dynamics, Ford, and Halliburton. The reason for this is simple. Plastics get old and break, and metals heat up easily and rust. Engineered ceramics are more expensive but are worth the price because they almost never wear out, and depending on how they are cooked, they can be almost as hard as diamond. CoorsTek has taken advantage of this superior durability and is reaping the benefits from selling a huge variety of different products to many manufacturers.
In 2000, 49% of CoorsTek sales came from their semiconductor business but the dot-com bubble burst caused a 25% loss in business the following year. John Coors saw the stock plummet and decided to take matters into his own hands. He hatched a plan for him and his family to buy 100% of the shares of the then publically traded company. By March of 2003, John and the rest of the Coors family won the bid and with a bank loan, bought the 69% of stock that they didn’t already own for a whopping $191 million. This price valued the company at $278 million.
CoorsTek’s success can be attributed to its swift response to changing markets. This can be done so efficiently because the company can completely change its product offerings year to year without checking in with a public board of directors or worrying how investors will respond. The proof can be seen when comparing annual revenues from when the company was public to now.
A Forbes article on the subject states that, “When CoorsTek was last a public company its annual revenues were $334 million and its operating loss was $32 million. Since the Coors family took it private in 2003, revenues have jumped to $1.25 billion, and the company claims it has turned a net profit every single quarter…” Forbes also estimates that CoorsTek’s cash flow will reach $340 million sometime this year. Now that CoorsTek is owned entirely by the Coors family, the company is worth an estimated $2.5 billion, about $200 million more than the family’s 16 percent stake in the brewery.
These substantial results provide proof of the strength of the Coors family and their ability to own and operate a successful business. It’s not surprising to me however that the Coors family makes more money from their ceramics company than from the brewery considering they are private owners, whereas they only own 16% stake in the brewing business. What is surprising is the fact that they even had business elsewhere. I had only ever figured that they were involved in the brewery, which made this fact about the Coors family particularly interesting.