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Coherent, Inc. Reports Third Fiscal Quarter Results

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SANTA CLARA, Calif., July 30, 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 third fiscal quarter ended June 29, 2013.

FINANCIAL HIGHLIGHTS


Three Months Ended


Nine Months Ended

GAAP Results

(in millions except per share data)

June 29,


March 30,


June 30,


June 29,


June 30,


2013


2013


2012


2013


2012


Bookings

$189.2


$201.8


$218.9


$567.0


$603.9


Net sales

$213.7


$200.1


$196.4


$597.0


$580.4


Net income

$16.7


$15.0


$17.2


$45.8


$50.4


Diluted EPS

$0.68


$0.61


$0.72


$1.87


$2.10













Non-GAAP Results

(in millions except per share data)



















Net income

$22.6


$20.7


$21.3


$61.8


$60.7


Diluted EPS

$0.91


$0.84


$0.88


$2.53


$2.53


 

THIRD FISCAL QUARTER DETAILS

For the third fiscal quarter ended June 29, 2013, Coherent announced net sales of $213.7 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $16.7 million, or $0.68 per diluted share.  These results compare to net sales of $196.4 million and net income of $17.2 million, or $0.72 per diluted share, for the third quarter of fiscal 2012. Non-GAAP net income for the third quarter of fiscal 2013 was $22.6 million, or $0.91 per diluted share.  Non-GAAP net income for the third quarter of fiscal 2012 was $21.3 million, or $0.88 per diluted share. Beginning in the second quarter of fiscal 2013, we 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 second quarter of fiscal 2013 were $200.1 million and net income, on a GAAP basis, was $15.0 million, or $0.61 per diluted share. Non-GAAP net income for the second quarter of fiscal 2013 was $20.7 million, or $0.84 per diluted share.

Bookings received during the third fiscal quarter ended June 29, 2013 of $189.2 million decreased 13.6% from $218.9 million in the same prior year period and decreased by 6.3% compared to bookings of $201.8 million in the immediately preceding quarter.  The book-to-bill ratio was 0.89, and ending backlog shipping in the next 12 months was $299.2 million at June 29, 2013, compared to a backlog of $333.0 million at March 30, 2013 and a backlog of $369.4 million at June 30, 2012.

"There are a number of interesting opportunities as we finish fiscal 2013 and enter fiscal 2014.  We expect to see meaningful orders in our laser annealing business as early as the current quarter and extending into fiscal 2014. We shipped a 3 kilowatt fiber laser prototype to a lead customer and the initial test results are positive.  The next phase of testing is field deployment qualification, which is the precursor to a volume commercial order.  And finally, we have delivered lasers to a number of customers who are developing processes for strengthened glass cutting," said John Ambroseo, Coherent's President and CEO.

Coherent ended the quarter with cash, cash equivalents and short term investments of $201.7 million, a decrease of $2.3 million from cash, cash equivalents and short term investments of $204.0 million at March 30, 2013.

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

Nine Months Ended


June 29,


March 30,


June 30,


June 29,


June 30,



2013


2013


2012


2013


2012













Net sales

$213,725


$200,058


$196,383


$596,985


$580,434


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

130,461


123,727


116,138


359,755


342,182


Gross profit

83,264


76,331


80,245


237,230


238,252


Operating expenses:











Research & development(A) (B)

21,782


20,146


19,306


61,229


58,408


Selling, general & administrative(A) (B)

38,748


37,346


32,894


113,076


102,902


Intangibles amortization(C)

1,290


1,942


1,723


4,086


4,970


    Total operating expenses

61,820


59,434


53,923


178,391


166,280


Income from operations

21,444


16,897


26,322


58,839


71,972


Other income (expense), net(B)  

(953)


1,295


(1,937)


(1,095)


493


Income before income taxes

20,491


18,192


24,385


57,744


72,465


Provision for income taxes(E)

3,806


3,190


7,177


11,904


22,051


Net income

$16,685


$15,002


$17,208


$45,840


$50,414













Net income per share:











Basic

$0.69


$0.62


$0.73


$1.91


$2.14


Diluted

$0.68


$0.61


$0.72


$1.87


$2.10













Shares used in computation:











Basic

24,310


24,085


23,633


24,055


23,538


Diluted

24,690


24,475


24,054


24,462


24,004


 

(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

Nine Months Ended


June 29,


March 30,


June 30,


June 29,


June 30,


2013


2013


2012


2013


2012

Cost of sales

$576


$594


$453


$1,605


$1,263

Research & development

455


467


407


1,398


1,231

Selling, general & administrative

3,610


3,581


3,266


11,274


9,814

Impact on income from operations

$4,641


$4,642


$4,126


$14,277


$12,308

 

For the quarters ended June 29, 2013, March 30, 2013, and June 30, 2012, the impact on net income, net of tax was $3,446 ($0.14 per diluted share), $3,497 ($0.14 per diluted share) and $2,852 ($0.12 per diluted share), respectively. For the nine months ended June 29, 2013 and June 30, 2012, the impact on net income, net of tax was $10,454 ($0.43 per diluted share) and $8,441 ($0.35 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

Nine Months Ended


June 29,


March 30,


June 30,


June 29,


June 30,


2013


2013


2012


2013


2012

Cost of sales

$35


$37


$(25)


$86


$25

Research & development

159


149


(93)


370


139

Selling, general & administrative

841


1,066


(611)


2,333


944

Impact on income from operations

$1,035


$1,252


$(729)


$2,789


$1,108

For the quarters ended June 29, 2013, March 30, 2013 and June 30, 2012, the impact on other income (expense) net from gains or losses on deferred compensation plan assets was income of $1,010, income of $983 and expense of $1,051, respectively. For the nine months ended June 29, 2013 and June 30, 2012, the impact on other income (expense) net was income of $2,287 and income of $436, respectively.

(C)    For the quarters ended June 29, 2013, March 30, 2013 and June 30, 2012, the impact of amortization of intangibles expense was $2,724 ($2,194 net of tax ($0.09 per diluted share)), $3,408 ($2,775 net of tax ($0.11 per diluted share)) and $1,723 ($1,212 net of tax ($0.05 per diluted share)), respectively. For the nine months ended June 29, 2013 and June 30, 2012, the impact of amortization of intangibles expense was $7,313 ($5,836 net of tax ($0.24 per diluted share)) and $4,970 ($3,456 net of tax ($0.14 per diluted share)), respectively.

(D)    For the quarters ended June 29, 2013 and March 30, 2013, the impact on net income of our inventory step up costs related to our recent acquisitions was $367 ($257 net of tax ($0.01 per diluted share)) and $1,130 ($791 net of tax ($0.03 per diluted share)), respectively. For the nine months ended June 29, 2013, the impact on net income of our inventory step up costs related to our recent acquisitions was $1,589 ($1,112 net of tax ($0.05 per diluted share)).

(E)    The nine months ended June 29, 2013 included $1,398 ($0.06 per diluted share) benefit from the renewal of the R&D tax credit for fiscal 2012. The nine months ended June 30, 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): 


June 29,

2013


September 29,

 2012

ASSETS




Current assets:




Cash, cash equivalents and short-term investments                         

$201,682


$224,929

Accounts receivable, net                                                                         

146,184


144,345

Inventories                                                                                                

169,003


160,113

Prepaid expenses and other assets                                                        

91,219


85,098

    Total current assets                                                                              

608,088


614,485

Property and equipment, net                                                                     

113,952


115,096

Other assets                                                                                                   

222,714


151,191

    Total assets                                                                                           

$944,754


$880,772





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Current portion of long-term obligations                                             

$ 6


$ 17

Accounts payable                                                                                    

40,869


29,088

Other current liabilities                                                                            

122,113


124,683

    Total current liabilities                                                                         

162,988


153,788

Other long-term liabilities                                                                            

62,759


55,328

Total stockholders' equity                                                                          

719,007


671,656

    Total liabilities and stockholders' equity                                         

$944,754


$880,772

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


Three Months Ended

Nine Months Ended



June 29, 2013


March 30, 2013


June 30, 2012


June 29, 2013


June 30, 2012

GAAP net income

$16,685


$15,002


$17,208


$45,840


$50,414

Stock-related compensation expense

3,446


3,497


2,852


10,454


8,441

Intangibles amortization 

2,194


2,775


1,212


5,836


3,456

Inventory step-up

257


791


--


1,112


--

Non-recurring tax expense (release) items

--


(1,398)


--


(1,398)


(1,647)

Non-GAAP net income

$22,582


$20,667


$21,272


$61,844


$60,664



Non-GAAP net income per diluted share

$  0.91


$ 0.84


$  0.88


$  2.53


$  2.53

 

 

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements, as defined under the Federal securities laws. These forward-looking statements include the statements in this press release that relate to any timing for or occurrence of orders in the Company's laser annealing business or commercial orders of the Company's 3 kilowatt fiber laser product. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.  Factors that could cause actual results to differ materially include risks and uncertainties, including, but not limited to, risks associated with any general market recovery, growth in demand for our products, growth in demand for FPD products,  the demand for and use of short-pulse lasers in commercial applications, our successful implementation of our customer design wins,  our and our customers' exposure to risks associated with worldwide economic conditions and, the ability of our customers to forecast their own end markets, our ability to accurately forecast future periods, customer acceptance and adoption of our new product offerings, continued timely availability of products and materials from our suppliers, our ability to timely ship our products and our customers' ability to accept such shipments, our ability to have our customers qualify our product offerings, worldwide government economic policies and other risks identified in the Company's SEC filings.  Readers are encouraged to refer to the risk disclosures and critical accounting policies and estimates described in the Company's reports on Forms 10-K, 10-Q and 8-K, as applicable and as filed from time-to-time by the Company.  Actual results, events and performance may differ materially from those presented herein.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  The Company undertakes no obligation to update these forward-looking statements as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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.



RELATED LINKS
http://www.coherent.com

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