Coherent, Inc. Reports Record Quarterly Results
SANTA CLARA, Calif., July 29 /PRNewswire-FirstCall/ -- 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 July 3, 2010.
FINANCIAL HIGHLIGHTS
Three Months Ended |
Nine Months Ended |
|||||||||
GAAP Results (in millions except per share data) |
July 3, |
April 3, |
July 4, |
July 3, |
July 4, |
|||||
2010 |
2010 |
2009 |
2010 |
2009 |
||||||
Bookings |
$180.6 |
$164.5 |
$88.6 |
$503.5 |
$285.8 |
|||||
Net sales |
$166.7 |
$149.2 |
$98.5 |
$438.7 |
$328.3 |
|||||
Net income (loss) |
$14.4 |
$8.5 |
$(7.0) |
$27.1 |
$(30.8) |
|||||
Diluted EPS |
$0.57 |
$0.34 |
$(0.29) |
$1.08 |
$(1.27) |
|||||
Non-GAAP Results (in millions except per share data) |
||||||||||
Net income (loss) |
$16.8 |
$11.3 |
$(2.2) |
$33.2 |
$6.8 |
|||||
Diluted EPS |
$0.66 |
$0.45 |
$(0.09) |
$1.33 |
$0.28 |
|||||
THIRD FISCAL QUARTER DETAILS
For the third fiscal quarter ended July 3, 2010, Coherent announced record net sales of $166.7 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $14.4 million ($0.57 per diluted share). These results compare to net sales of $98.5 million and net loss of $7.0 million, or $0.29 per share, for the third quarter of fiscal 2009. Non-GAAP net income for the third quarter of fiscal 2010 was $16.8 million, or $0.66 per diluted share, and non-GAAP net loss for the third quarter of fiscal 2009 was $2.2 million, or $0.09 per share. Please see the reconciliation of GAAP to non-GAAP results included at the end of our release.
Net sales for the second quarter of fiscal 2010 were $149.2 million and net income, on a GAAP basis, was $8.5 million ($0.34 per diluted share). Non-GAAP net income for the second quarter of fiscal 2010 was $11.3 million, or $0.45 per diluted share.
Bookings received during the three months ended July 3, 2010 of $180.6 million increased 103.7% from $88.6 million in the same prior year period and increased by 9.8% compared to bookings of $164.5 million in the immediately preceding quarter. The book-to-bill ratio was 1.08, resulting in backlog of $230.2 million at July 3, 2010 compared to a backlog of $217.2 million at April 3, 2010 and a backlog of $137.6 million at July 4, 2009.
As of July 3, 2010, year-to-date sales were $438.7 million and net profit was $27.1 million ($1.08 per diluted share) on a GAAP basis compared to the prior year period sales of $328.3 million and a net loss on a GAAP basis of $30.8 million ($1.27 per share). Bookings received for the nine month period ended July 3, 2010 were $503.5 million, compared to $285.8 million in bookings received during the same period a year ago.
Coherent ended the quarter with cash and short term investments of $254.0 million, a decrease of $11.1 million from cash and short term investments of $265.1 million at April 3, 2010.
"The third quarter operating income was not only the best in the company's history, it also serves to demonstrate the combined benefits of our more efficient operating structure, higher revenue and favorable mix. We are equally encouraged by record-setting orders as they reflect the alignment we have achieved with our customers. Microelectronics bookings were particularly strong due to investments in LED manufacturing and mobile communications (i.e., smartphones). Demand for lasers used in materials processing and instrumentation was also very healthy as we capitalize on market recovery and new product introductions," said John Ambroseo, Coherent's President and Chief Executive Officer.
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 available 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 |
|||||||||
July 3, |
April 3, |
July 4, |
July 3, |
July 4, |
||||||
2010 |
2010 |
2009 |
2010 |
2009 |
||||||
Net sales |
$166,697 |
$149,157 |
$98,479 |
$438,669 |
$328,289 |
|||||
Cost of sales (A) (B) (E) |
92,350 |
83,544 |
64,865 |
247,677 |
204,679 |
|||||
Gross profit |
74,347 |
65,613 |
33,614 |
190,992 |
123,610 |
|||||
Operating expenses: |
||||||||||
Research & development (A) (B) (E) |
18,264 |
19,488 |
15,529 |
53,162 |
45,917 |
|||||
Selling, general & administrative (A) (B) (C) (E) |
31,584 |
31,164 |
29,223 |
90,727 |
80,813 |
|||||
Impairment of goodwill (D) |
- |
- |
- |
- |
19,286 |
|||||
Intangibles amortization |
2,041 |
1,956 |
1,907 |
5,958 |
5,744 |
|||||
Total operating expenses |
51,889 |
52,608 |
46,659 |
149,847 |
151,760 |
|||||
Income (loss) from operations |
22,458 |
13,005 |
(13,045) |
41,145 |
(28,150) |
|||||
Other income (expense), net (E) |
(185) |
1,492 |
3,329 |
2,099 |
(2,501) |
|||||
Income (loss) before income taxes |
22,273 |
14,497 |
(9,716) |
43,244 |
(30,651) |
|||||
Provision for (benefit from) income taxes (F) |
7,869 |
6,017 |
(2,701) |
16,181 |
173 |
|||||
Net income (loss) |
$14,404 |
$8,480 |
$(7,015) |
$27,063 |
$(30,824) |
|||||
Net income (loss) per share: |
||||||||||
Basic |
$0.58 |
$0.34 |
$(0.29) |
$1.09 |
$(1.27) |
|||||
Diluted |
$0.57 |
$0.34 |
$(0.29) |
$1.08 |
$(1.27) |
|||||
Shares used in computation: |
||||||||||
Basic |
25,022 |
24,704 |
24,331 |
24,732 |
24,245 |
|||||
Diluted |
25,438 |
24,996 |
24,331 |
25,037 |
24,245 |
|||||
(A) |
Stock-related compensation expense included in operating results is summarized below (all footnote amounts are unaudited, in thousands): |
|
Stock-related compensation expense |
Three Months Ended |
Nine Months Ended |
||||||||
July 3, |
April 3, |
July 4, |
July 3, |
July 4, |
||||||
2010 |
2010 |
2009 |
2010 |
2009 |
||||||
Cost of sales |
$233 |
$256 |
$200 |
$708 |
$660 |
|||||
Research & development |
309 |
280 |
249 |
862 |
683 |
|||||
Selling, general & administrative |
1,650 |
1,514 |
1,039 |
4,834 |
4,260 |
|||||
Impact on income (loss) from operations |
$2,192 |
$2,050 |
$1,488 |
$6,404 |
$5,603 |
|||||
For the quarters ended July 3, 2010, April 3, 2010, and July 4, 2009, the impact on net income (loss), net of tax was $1,590 ($0.06 per diluted share), $1,873 ($0.07 per diluted share) and $1,368 ($0.06 per share), respectively. For the nine months ended July 3, 2010 and July 4, 2009, the impact on net income (loss), net of tax was $4,982 ($0.19 per diluted share) and $4,493 ($0.19 per share), respectively. |
||
(B) |
Restructuring costs included in operating results are summarized below: |
|
Restructuring costs |
Three Months Ended |
Nine Months Ended |
||||||||
July 3, |
April 3, |
July 4, |
July 3, |
July 4, |
||||||
2010 |
2010 |
2009 |
2010 |
2009 |
||||||
Cost of sales |
$549 |
$707 |
$2,621 |
$1,565 |
$8,796 |
|||||
Research & development |
135 |
168 |
799 |
712 |
2,089 |
|||||
Selling, general & administrative |
526 |
685 |
1,469 |
1,729 |
3,110 |
|||||
Impact on income (loss) from operations |
$1,210 |
$1,560 |
$4,889 |
$4,006 |
$13,995 |
|||||
For the quarters ended July 3, 2010, April 3, 2010 and July 4, 2009, the impact on net income (loss), net of tax was $786 ($0.03 per diluted share), $978 ($0.04 per diluted share) and $3,354 ($0.14 per share), respectively. For the nine months ended July 3, 2010 and July 4, 2009, the impact on net income (loss), net of tax was $2,577($0.10 per diluted share) and $10,430 ($0.43 per share), respectively. |
||
(C) |
The quarter ended July 4, 2009 includes $108 ($74 net of tax ($0.00 per share)) of costs related to litigation resulting from our internal stock option investigation. The nine months ended July 3, 2010 includes $2,185 ($1,438 net of tax ($0.06 per diluted share)) net receipt from the settlement of litigation resulting from our internal stock option investigation. The nine months ended July 4, 2009 includes $947 ($699 net of tax ($0.03 per share)) of costs related to litigation resulting from our internal stock option investigation. |
|
(D) |
The nine months ended July 4, 2009 includes a $19,286 ($0.80 per diluted share) non-cash charge for the impairment of all of the goodwill of our Commercial Lasers and Components segment. |
|
(E) |
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 |
||||||||
July 3, |
April 3, |
July 4, |
July 3, |
July 4, |
||||||
2010 |
2010 |
2009 |
2010 |
2009 |
||||||
Cost of sales |
$(1) |
$4 |
$87 |
$35 |
$(141) |
|||||
Research & development |
7 |
30 |
309 |
169 |
(775) |
|||||
Selling, general & administrative |
(38) |
204 |
2,431 |
1,280 |
(4,354) |
|||||
Impact on income (loss) from operations |
$(32) |
$238 |
$2,827 |
$1,484 |
$(5,270) |
|||||
For the quarters ended July 3, 2010, April 3, 2010 and July 4, 2009, the impact on other income (expense) net from gains or losses on deferred compensation plan assets was expense of $341, income of $97 and income of $2,259, respectively. For the nine months ended July 3, 2010 and July 4, 2009, the impact on other income (expense) net was income of $819 and expense of $5,761, respectively. |
||
(F) |
The nine months ended July 4, 2009 include a tax charge of $2,666 ($0.11 per share) resulting from changes in state tax law. |
|
Summarized balance sheet information is as follows (unaudited, in thousands):
July 3, 2010 |
October 3, 2009 |
|||
ASSETS |
||||
Current assets: |
||||
Cash, cash equivalents and short-term investments |
$254,007 |
$243,635 |
||
Restricted cash |
625 |
- |
||
Accounts receivable, net |
98,355 |
74,235 |
||
Inventories |
99,409 |
97,767 |
||
Prepaid expenses and other assets |
69,916 |
67,133 |
||
Total current assets |
522,312 |
482,770 |
||
Property and equipment, net |
91,488 |
98,792 |
||
Other assets |
171,547 |
172,042 |
||
Total assets |
$785,347 |
$753,604 |
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
Current liabilities: |
||||
Current portion of long-term obligations |
$ 19 |
$ 9 |
||
Accounts payable |
31,844 |
21,639 |
||
Other current liabilities |
100,181 |
64,694 |
||
Total current liabilities |
132,044 |
86,342 |
||
Other long-term liabilities |
82,325 |
91,691 |
||
Total stockholders' equity |
570,978 |
575,571 |
||
Total liabilities and stockholders' equity |
$785,347 |
$753,604 |
||
Reconciliation of GAAP to Non-GAAP net income (unaudited, in thousands, net of tax):
Three Months Ended |
Nine Months Ended |
|||||||||
July 3, 2010 |
April 3, 2010 |
July 4, 2009 |
July 3, 2010 |
July 4, 2009 |
||||||
GAAP net income (loss) |
$14,404 |
$8,480 |
$(7,015) |
$27,063 |
$(30,824) |
|||||
Stock-related compensation expense |
1,590 |
1,873 |
1,368 |
4,982 |
4,493 |
|||||
Restructuring costs |
786 |
978 |
3,354 |
2,577 |
10,430 |
|||||
Stock option investigation and litigation expense (benefit) |
-- |
-- |
74 |
(1,438) |
699 |
|||||
Impairment of goodwill |
-- |
-- |
-- |
-- |
19,286 |
|||||
One-time tax expense |
-- |
-- |
-- |
-- |
2,666 |
|||||
Non-GAAP net income (loss) |
$16,780 |
$11,331 |
$(2,219) |
$33,184 |
$6,750 |
|||||
Non-GAAP net income per diluted share |
$ 0.66 |
$ 0.45 |
$ (0.09) |
$ 1.33 |
$ 0.28 |
|||||
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 our new product introductions and any market recovery. 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, our successful implementation of our customer design wins, our and our customers' exposure to risks associated with worldwide economic slowdowns, the ability of our customers to forecast their own end markets, our ability to increase our sales volumes, our ability to accurately forecast future periods, customer acceptance and adoption of our new product offerings, level of government spending and continued purchases of our existing and new products and services, 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, 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 Russell 2000. Please direct any questions to Leen Simonet, Chief Financial Officer at 408-764-4161. 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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