Coherent, Inc. Reports Fourth Fiscal Quarter and Year-End Results

      Coherent, Inc. Reports Fourth Fiscal Quarter and Year-End Results

PR Newswire

SANTA CLARA, Calif., Oct. 31, 2012

SANTA CLARA, Calif., Oct. 31, 2012 /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
fourth fiscal quarter and fiscal year ended September 29, 2012.

FINANCIAL HIGHLIGHTS

                                      Three Months Ended   Year Ended
GAAP Results                Sept. 29,  June 30,  Oct. 1,   Sept. 29,   Oct. 1,

(in millions except per     2012       2012      2011      2012        2011
share data)
Bookings                    $169.3     $218.9    $195.4    $773.2     $895.0
Net sales                   $188.7     $196.4    $208.0    $769.1     $802.8
Net income                  $12.5      $17.2     $31.4     $63.0      $93.2
Diluted EPS                 $0.52      $0.72     $1.25     $2.62      $3.66
Non-GAAP Results

(in millions except per share data)
Net income                  $17.1      $20.1     $24.2     $74.3      $88.1
Diluted EPS                 $0.71      $0.83     $0.96     $3.09      $3.46

FOURTH FISCAL QUARTER DETAILS

For the fourth fiscal quarter ended September 29, 2012, Coherent announced net
sales of $188.7 million and net income, on a U.S. generally accepted
accounting principles (GAAP) basis, of $12.5 million, or $0.52 per diluted
share. Coherent's results for the fourth quarter of fiscal 2012 includes a
charge of approximately $4.3 million after tax due to the write-off of
previously acquired intangible assets and inventories and a tax benefit of
approximately $2.8 million due to the release of tax valuation allowances.
These results compare to net sales of $208.0 million and net income of $31.4
million, or $1.25 per diluted share, for the fourth quarter of fiscal 2011.
Coherent's tax expense for the fourth fiscal quarter of 2011 was reduced by
approximately $9.7 million due to the release of tax reserves and related
interest as a result of an IRS settlement and the closure of open tax years.

Non-GAAP net income for the fourth quarter of fiscal 2012 was $17.1 million,
or $0.71 per diluted share. Non-GAAP net income for the fourth quarter of
fiscal 2011 was $24.2 million, or $0.96 per diluted share. 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 third quarter of fiscal 2012 were $196.4 million and net
income, on a GAAP basis, was $17.2 million, or $0.72 per diluted share.
Non-GAAP net income for the third quarter of fiscal 2012 was $20.1 million, or
$0.83 per diluted share.

Bookings received during the fourth fiscal quarter ended September 29, 2012 of
$169.3 million decreased 13.4% from $195.4 million in the same prior year
period and decreased by 22.7% compared to bookings of $218.9 million in the
immediately preceding quarter. The book-to-bill ratio was 0.90, resulting in
backlog of $352.8 million at September 29, 2012, compared to a backlog of
$369.4 million at June 30, 2012 and a backlog of $356.5 million at October 1,
2011.

For the fiscal year ended September 29, 2012, Coherent posted net sales of
$769.1 million and net profit of $63.0 million ($2.62 per diluted share) on a
GAAP basis compared to the prior year sales of $802.8 million and a net profit
on a GAAP basis of $93.2 million ($3.66 per diluted share). Bookings
received for the fiscal year ended September 29, 2012 were $773.2 million,
compared to $895.0 million in bookings received during fiscal 2011.

"Sequentially stronger demand in materials processing, instrumentation and
scientific was offset by lower bookings in microelectronics in our fourth
quarter. Record orders for our Meta laser workstations contributed to the
materials processing total. Instrumentation was paced by medical OEM orders
for both aesthetic and ophthalmic products. Scientific was up on third
quarter push outs and seasonality. Our Microelectronics bookings were down
due to the timing of flat panel display (FPD) orders and slowing in the semi
cap market. While we expect these trends to continue in the current quarter,
we also anticipate another round of meaningful FPD bookings in fiscal 2013.
Fourth quarter revenues were negatively impacted by the late arrival of
certain key components for a scheduled shipment of one of our Gen8 FPD
systems, causing us to miss the acceptance window, which reduced revenue by
more than $7 million," said John Ambroseo, Coherent's President and Chief
Executive Officer. 

"We have recently acquired two companies, Innolight Innovative Laser and
Systemtechnik GmbH and MiDAZ Lasers Ltd, which provide core technology
building blocks for an emerging class of commercial, sub-nanosecond lasers for
microelectronics manufacturing. Innolight's semiconductor-based architecture
delivers pulsed output that can be amplified by conventional or fiber
amplifiers to ultimately deliver infrared, green or ultraviolet light capable
of processing a range of materials. The technology acquired through MiDAZ is
an elegant and simple amplifier that can be incorporated into various systems
to create compact, electrically-efficient and long-lasting lasers," Ambroseo
added.

Coherent ended the quarter with cash, cash equivalents and short term
investments of $224.9 million, an increase of $15.3 million from cash and
short term investments of $209.6 million at June 30, 2012. On October 4, 2012,
the Board of Directors authorized a buyback program whereby the Company is
authorized to repurchase up to $25 million of our common stock.

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             Year Ended
                         Sept. 29,  June 30,  Oct. 1,    Sept. 29,   Oct. 1,
                         2012       2012      2011       2012        2011
Net sales                $188,654   $196,383  $207,961   $769,088    $802,834
Cost of sales^(A) (B)    110,921    116,138   118,464    453,103     452,012
(C) (D)
Gross profit             77,733     80,245    89,497     315,985     350,822
Operating expenses:
Research &               19,852     19,306    19,718     78,260      81,232
development^(A) (B)
Selling, general &       35,617     32,894    36,459     138,519     149,499
administrative^(A) (B)
Intangibles              5,406      1,723     1,879      10,376      8,082
amortization^(C)
Total operating expenses 60,875     53,923    58,056     227,155     238,813
Income from operations   16,858     26,322    31,441     88,830      112,009
Other income (expense),  1,299      (1,937)   (25)       1,792       11,820
net^(B) ^ (D)
Income before income     18,157     24,385    31,416     90,622      123,829
taxes
Provision for income     5,609      7,177     36         27,660      30,591
taxes^(E)
Net income               $12,548    $17,208   $31,380    $62,962     $93,238
Net income per share:
Basic                    $0.53      $0.73     $1.27      $2.67       $3.74
Diluted                  $0.52      $0.72     $1.25      $2.62       $3.66
Shares used in
computation:
Basic                    23,629     23,633    24,697     23,561      24,924
Diluted                  24,095     24,054    25,167     24,026      25,464



(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            Three Months Ended            Year Ended
compensation expense
                         Sept. 29,  June 30,  Oct. 1,   Sept. 29,   Oct. 1,
                         2012       2012      2011      2012        2011
Cost of sales    $407       $453      $374      $1,670      $1,331
Research & development   397        407       390       1,628       1,474
Selling, general &       3,201      3,266     2,676     13,015      10, 158
administrative
Impact on income from    $4,005     $4,126    $3,440    $16,313     $12,963
operations

For the quarters ended September 29, 2012, June 30, 2012 and October 1, 2011,
the impact on net income, net of tax was $3,076 ($0.13 per diluted share),
$2,852 ($0.12 per diluted share) and $2,489 ($0.10 per diluted share),
respectively. For the years ended September 29, 2012 and October 1, 2011, the
impact on net income, net of tax was $11,517 ($0.48 per diluted share) and
$9,161 ($0.36 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               Three Months Ended     Year Ended
expense (benefit)
                          Sept. 29,  June 30,  Oct. 1,      Sept. 29,  Oct. 1,
                          2012       2012      2011         2012       2011
Cost of sales             $34        $(25)     $(50)        $59        $66
Research & development    154        (93)      (206)        293        280
Selling, general &        1,028      (611)     (1,390)      1,972      2,214
administrative
Impact on income from     $1,216     $(729)    $(1,646)     $2,324     $2,560
operations



For the quarters ended September 29, 2012, June 30, 2012 and October 1, 2011,
the impact on other income (expense) net from gains or losses on deferred
compensation plan assets was income of $1,207, expense of $1,051 and expense
of $1,763, respectively. For the years ended September 29, 2012 and October 1,
2011, the impact on other income (expense) net was income of $1,643 and income
of $3,123, respectively.

(C) The quarter and year ended September 29, 2012 include a $4,260 ($4,260
net of tax ($0.18 per diluted share)) charge due to the write-off of
previously acquired intangible assets ($3,970 recorded in intangibles
amortization) and inventories ($290 recorded in cost of sales).

(D) The year ended October 1, 2011 includes a $5,918 ($6,113 net of tax
($0.24 per diluted share)) gain from the dissolution of our Finland
operations, of which a charge of $593 is recorded in cost of sales and a
benefit of $6,511 is recorded in other income (expense), net.

(E) The quarter and year ended September 29, 2012 include a $2,790 ($0.12
per diluted share) benefit due to decreases in valuation allowances against
deferred tax assets. The year ended September 29, 2012 includes $1,647 ($0.07
per diluted share) release of tax reserves and related interest as a result of
the closure of open tax years. The year ended October 1, 2011 includes a
$9,686 ($0.38 per diluted share) benefit from the release of tax reserves and
related interest as a result of an IRS settlement and the closure of open tax
years and a $1,549 ($0.06 per diluted share) expense due to an increase in
valuation allowances against deferred tax assets.



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



                                                                                                                  Sept.     Oct. 1,
                                                                                                                  29,
                                                                                                                            2011
                                                                                                                  2012
ASSETS
Current assets:
Cash, cash equivalents and short-term investments                                 $224,929  $220,203
Accounts receivable, net            144,345   141,037
Inventories 160,113   152,385
Prepaid expenses and other assets                   85,098    67,021
Total current assets           614,485   580,646
Property and equipment, net           115,096   104,504
Other                                                                                                             151,191   158,116
assets
Total assets     $880,772  $843,266
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations                      $ 17      $ 15
Accounts payable        29,088    39,841
Other current liabilities       124,683   122,549
Total current liabilities          153,788   162,405
Other long-term liabilities     55,328    62,860
Total stockholders' equity        671,656   618,001
Total liabilities and stockholders' equity                         $880,772  $843,266



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



                             Three Months Ended            Year Ended
                             Sept. 29,  June 30,  Oct. 1,  Sept. 29,  Oct. 1,
                             2012       2012               2012
                                                  2011                2011
GAAP net income              $12,548    $17,208   $31,380  $62,962    $93,238
Stock-related compensation   3,076      2,852     2,489    11,517     9,161
expense
Gain on Finland dissolution  --         --        --       --         (6,113)
Write-off of intangibles and 4,260      --        --       4,260      --
inventory
Non-recurring tax expense    (2,790)    --        (9,686)  (4,437)    (8,137)
(release) items
Non-GAAP net income          $17,094    $20,060   $24,183  $74,302    $88,149
Non-GAAP net income per      $ 0.71    $ 0.83   $ 0.96  $ 3.09    $ 3.46
diluted share



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 timing and amounts of any
additional orders for the Company's products, including those related to the
flat panel display market, the timing and ability of the Company to create
compact, electrically-efficient and long-lasting lasers utilizing the assets
of the Innolight and MiDAZ acquisitions and the achievement, amount and timing
of any incremental sales as related to the acquisition of Innolight and MiDAZ.
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 successful implementation and
utilization of the assets acquired from our Innolight and MiDAZ acquisitions,
our ability to successfully integrate Innolight and MiDAZ into our operations,
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 408-764-4161. For more
information about Coherent, visit the Company's Web site at
http://www.coherent.com/ for product and financial updates.

SOURCE Coherent, Inc.

Website: http://www.coherent.com
Contact: Leen Simonet, +1-408-764-4161