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