Coherent, Inc. Reports Second Fiscal Quarter Results

Apr 24, 2013, 16:00 ET from Coherent, Inc.

SANTA CLARA, Calif., April 24, 2013 /PRNewswire/ -- Coherent, Inc. (NASDAQ: COHR), a world leader in providing photonics based solutions to the commercial and scientific research markets, today announced financial results for its second fiscal quarter ended March 30, 2013.

FINANCIAL HIGHLIGHTS

Three Months Ended

Six Months Ended

GAAP Results

(in millions except per share data)

March 30,

Dec. 29,

March 31,

March 30,

March 31,

2013

2012

2012

2013

2012

Bookings

$201.8

$176.0

$183.1

$377.8

$385.0

Net sales

$200.1

$183.2

$193.3

$383.3

$384.1

Net income

$15.0

$14.2

$16.2

$29.2

$33.2

Diluted EPS

$0.61

$0.58

$0.67

$1.20

$1.38

Non-GAAP Results

(in millions except per share data)

Net income

$20.7

$18.6

$18.6

$39.3

$39.4

Diluted EPS

$0.84

$0.77

$0.77

$1.61

$1.64

 

SECOND FISCAL QUARTER DETAILS

For the second fiscal quarter ended March 30, 2013, Coherent announced net sales of $200.1 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $15.0 million, or $0.61 per diluted share.  These results compare to net sales of $193.3 million and net income of $16.2 million, or $0.67 per diluted share, for the second quarter of fiscal 2012. Non-GAAP net income for the second quarter of fiscal 2013 was $20.7 million, or $0.84 per diluted share.  Non-GAAP net income for the second quarter of fiscal 2012 was $18.6 million, or $0.77 per diluted share. We have revised our presentation of non-GAAP net income and non-GAAP diluted EPS for all periods presented to exclude the effect of intangibles amortization and inventory step up costs. For a complete overview of the differences between GAAP and non-GAAP results, please see the reconciliation table included at the end of our release.

Net sales for the first quarter of fiscal 2013 were $183.2 million and net income, on a GAAP basis, was $14.2 million, or $0.58 per diluted share. Non-GAAP net income for the first quarter of fiscal 2013 was $18.6 million, or $0.77 per diluted share.

Bookings received during the second fiscal quarter ended March 30, 2013 of $201.8 million increased 10.2% from $183.1 million in the same prior year period and increased by 14.7% compared to bookings of $176.0 million in the immediately preceding quarter.  The book-to-bill ratio was 1.01, resulting in backlog of $333.0 million at March 30, 2013, compared to a backlog of $348.1 million at December 29, 2012 and a backlog of $349.2 million at March 31, 2012.

"Demand improved across many of our commercial end markets.  We posted record bookings for materials processing including our first volume order for the Highlight™ 1000FL fiber laser for flatbed cutting, strong orders for the Highlight™ D-Series direct diode system for additive manufacturing and several orders for Diamond™ E-1000 lasers to be used in converting.  The advanced packaging (API) market continued to build momentum with orders rising sequentially and year-over-year due to rising demand for any layer HDI PCBs for mobile devices and high-end IC substrates.  Orders also picked up in the semicap market as utilization rates rose and end users increased their service needs and expanded capacity for advanced nodes. Bookings for medical OEM applications were at an all-time high and benefitted from our recent acquisition of Lumera Laser.  The only market to exhibit softness was the research market where stronger demand in Asia could not overcome the effects of sequestration in the U.S. and belt tightening in Europe," said John Ambroseo, Coherent's President and Chief Executive Officer.

Coherent ended the quarter with cash, cash equivalents and short term investments of $204.0 million, an increase of $24.2 million from cash, cash equivalents and short term investments of $179.8 million at December 29, 2012.

CONFERENCE CALL REMINDER

The Company will host a conference call today to discuss its financial results at 1:30 P.M. Pacific (4:30 P.M. Eastern). A listen-only broadcast of the conference call can be accessed on the Company's website at either http://www.coherent.com/Investors/ or http://www.earnings.com. For those who are not able to listen to the live broadcast, the call will be archived for approximately three months on both web sites.  A transcript of management's prepared remarks can be found at http://www.coherent.com/Investors/.

Summarized statement of operations information is as follows (unaudited, in thousands except per share data):

Three Months Ended

Six Months Ended

March 30,

Dec. 29,

March 31,

March 30,

March 31,

2013

2012

2012

2013

2012

Net sales

$200,058

$183,202

$193,284

$383,260

$384,051

Cost of sales (A) (B) (C) (D)

123,727

105,567

115,636

229,294

226,044

Gross profit

76,331

77,635

77,648

153,966

158,007

Operating expenses:

Research & development (A) (B)

20,146

19,301

20,323

39,447

39,102

Selling, general & administrative (A) (B)

37,346

36,982

35,377

74,328

70,008

Intangibles amortization (C)

1,942

854

1,611

2,796

3,247

Total operating expenses

59,434

57,137

57,311

116,571

112,357

Income from operations

16,897

20,498

20,337

37,395

45,650

Other income (expense), net (B)

1,295

(1,437)

1,912

(142)

2,430

Income before income taxes

18,192

19,061

22,249

37,253

48,080

Provision for income taxes (E)

3,190

4,908

6,094

8,098

14,874

Net income

$15,002

$14,153

$16,155

$29,155

$33,206

Net income per share:

Basic

$0.62

$0.60

$0.69

$1.22

$1.41

Diluted

$0.61

$0.58

$0.67

$1.20

$1.38

Shares used in computation:

Basic

24,085

23,770

23,521

23,928

23,491

Diluted

24,475

24,222

23,996

24,348

23,979

 

(A)   

Stock-related compensation expense included in operating results is summarized below (all footnote amounts are unaudited, in thousands, except per share data):

 

Stock-related compensation expense

Three Months Ended

Six Months Ended

Mar. 30,

Dec. 29,

Mar. 31,

Mar. 30,

Mar. 31,

2013

2012

2012

2013

2012

Cost of sales

$594

$435

$441

$1,029

$810

Research & development

467

476

431

943

824

Selling, general & administrative

3,581

4,083

3,288

7,664

6,548

Impact on income from operations

$4,642

$4,994

$4,160

$9,636

$8,182

For the quarters ended March 30, 2013, December 29, 2012, and March 31, 2012, the impact on net income, net of tax was $3,497 ($0.14 per diluted share), $3,511 ($0.14 per diluted share) and $2,895 ($0.12 per diluted share), respectively. For the six months ended March 30, 2013 and March 31, 2012, the impact on net income, net of tax was $7,008 ($0.29 per diluted share) and $5,589 ($0.23 per diluted share), respectively.

(B)   

Changes in deferred compensation plan liabilities are included in cost of sales and operating expenses while gains and losses on deferred compensation plan assets are included in other income (expense) net.  Deferred compensation expense (benefit) included in operating results is summarized below:

 

Deferred compensation expense (benefit)

Three Months Ended

Six Months Ended

Mar. 30,

Dec. 29,

Mar. 31,

Mar. 30,

Mar. 31,

2013

2012

2012

2013

2012

Cost of sales

$37

$14

$46

$51

$50

Research & development

149

62

213

211

232

Selling, general & administrative

1,066

426

1,439

1,492

1,555

Impact on income from operations

$1,252

$502

$1,698

$1,754

$1,837

 

For the quarters ended March 30, 2013, December 29, 2012 and March 31, 2012, the impact on other income (expense) net from gains or losses on deferred compensation plan assets was income of $983, income of $294 and income of $1,541, respectively. For the six months ended March 30, 2013 and March 31, 2012, the impact on other income (expense) net was income of $1,277 and income of $1,487, respectively.

(C)   

For the three and six months ended March 30, 2013, the impact of amortization of intangibles expense was $3,408 ($2,775 net of tax ($0.11 per diluted share)) and $4,589 ($3,642 net of tax ($0.15 per diluted share)), respectively. For the three and six months ended March 31, 2012, the impact of amortization of intangibles expense was $1,611 ($1,162 net of tax ($0.05 per diluted share)) and $3,247 ($2,244 net of tax ($0.09 per diluted share)), respectively.

(D)   

For the three and six months ended March 30, 2013, the impact on net income of our inventory step up costs related to our recent acquisitions, was $1,130 ($791 net of tax ($0.03 per diluted share)) and $1,222 ($855 net of  tax ($0.04 per diluted share)), respectively.

(E)   

The three and six months ended March 30, 2013 included $1,398 ($0.06 per diluted share) benefit from the renewal of the R&D tax credit for fiscal 2012. The three and six months ended March 31, 2012 included $1,647 ($0.07 per diluted share) release of tax reserves and related interest as a result of the closure of open tax years.

 

Summarized balance sheet information is as follows (unaudited, in thousands):

March 30, 2013

September 29, 2012

ASSETS

Current assets:

Cash, cash equivalents and short-term investments

$203,990

$224,929

Accounts receivable, net 

134,479

144,345

Inventories  

166,865

160,113

Prepaid expenses and other assets 

80,765

85,098

Total current assets    

586,099

614,485

Property and equipment, net 

114,368

115,096

Other assets  

222,896

151,191

Total assets   

$923,363

$880,772

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term obligations

$ 11

$ 17

Accounts payable 

39,443

29,088

Other current liabilities

131,970

124,683

Total current liabilities

171,424

153,788

Other long-term liabilities 

64,663

55,328

Total stockholders' equity

687,276

671,656

Total liabilities and stockholders' equity

$923,363

$880,772

 

Reconciliation of GAAP to Non-GAAP net income (unaudited, in thousands, net of tax):

Three Months Ended

Six Months Ended

Mar. 30, 2013

Dec. 29,

2012

Mar. 31, 2012

Mar. 30, 2013

Mar. 31, 2012

GAAP net income

$15,002

$14,153

$16,155

$29,155

$33,206

Stock-related compensation expense

3,497

3,511

2,895

7,008

5,589

Intangibles amortization

2,775

867

1,162

3,642

2,244

Inventory step-up

791

64

--

855

--

Non-recurring tax expense (release) items

(1,398)

--

(1,647)

(1,398)

(1,647)

Non-GAAP net income

$20,667

$18,595

$18,565

$39,262

$39,392

Non-GAAP net income per diluted share

$ 0.84

$ 0.77

$ 0.77

$ 1.61

$ 1.64

Founded in 1966, Coherent, Inc. is a world leader in providing photonics based solutions to the commercial and scientific research markets and part of the Standard & Poor's SmallCap 600 Index and the Russell 2000. Please direct any questions to Leen Simonet, Chief Financial Officer at 408-764-4110. For more information about Coherent, visit the Company's Web site at http://www.coherent.com/ for product and financial updates.

SOURCE Coherent, Inc.



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