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Coherent, Inc. Reports First Fiscal Quarter Results

SANTA CLARA, Calif., Jan. 25, 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 first fiscal quarter ended December 31, 2011.

FINANCIAL HIGHLIGHTS



Three Months Ended


GAAP Results

(in millions except per share data)

Dec. 31,


Oct. 1,


Jan. 1,


2011


2011


2011


Bookings                        

$201.8


$195.4


$234.4


Net sales                        

$190.8


$208.0


$183.1


Net income                       

$17.1


$31.4


$19.1


Diluted EPS                       

$0.71


$1.25


$0.76









Non-GAAP Results

( in millions except per share data)











Net income                       

$19.7


$24.2


$21.4


Diluted EPS                       

$0.82


$0.96


$0.85





FIRST FISCAL QUARTER DETAILS

For the first fiscal quarter ended December 31, 2011, Coherent announced net sales of $190.8 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $17.1 million, or $0.71 per diluted share.  These results compare to net sales of $183.1 million and net income of $19.1 million, or $0.76 per diluted share, for the first quarter of fiscal 2011.  Non-GAAP net income for the first quarter of fiscal 2012 was $19.7 million, or $0.82 per diluted share.  Non-GAAP net income for the first quarter of fiscal 2011 was $21.4 million, or $0.85 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 fourth quarter of fiscal 2011 were $208.0 million and net income, on a GAAP basis, was $31.4 million, or $1.25 per diluted share.  Coherent's tax expense for the fourth quarter of fiscal 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 2011 was $24.2 million, or $0.96 per diluted share.  

Bookings received during the first fiscal quarter ended December 31, 2011 of $201.8 million decreased 13.9% from $234.4 million in the same fiscal quarter of the prior year and increased by 3.3% compared to bookings of $195.4 million in the immediately preceding quarter.  The book-to-bill ratio was 1.06, resulting in backlog of $365.5 million at December 31, 2011 compared to a backlog of $356.5 million at October 1, 2011 and a backlog of $308.9 million at January 1, 2011.

"Coherent had good first quarter results despite the shadows cast by a credit crunch in China and sovereign debt woes in Europe. On the bookings side, we received orders for annealing lasers from two new customers in the flat panel display space and maintained market share gains in the research market," said John Ambroseo, Coherent's President and Chief Executive Officer.  "There has been a noticeable shift in customer sentiment since the start of the calendar year.  OLED TV demos at CES drew significant interest and TV manufacturers are targeting shipments later this year.  There is improving outlook from semiconductor equipment manufacturers.  Credit is expected to ease in China following the Chinese New Year celebration, which should increase demand in the materials processing and advanced packaging and interconnects markets.  We are well positioned in these markets due to a strong product portfolio and solid product pipeline."

Coherent ended the quarter with cash and short term investments of $203.1 million, a decrease of $17.1 million from cash and short term investments of $220.2 million at October 1, 2011. During the quarter ended December 31, 2011, the Company repurchased 450,500 shares of common stock at a cost of $20.7 million.

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


December 31,


October 1,


January 1,


2011


2011


2011







Net sales

$190,767


$207,961


$183,111

Cost of sales (A) (B)

110,408


118,464


100,717

Gross profit

80,359


89,497


82,394

Operating expenses:






Research & development (A) (B)

18,779


19,718


18,530

Selling, general & administrative (A) (B)

34,631


36,459


36,078

Intangibles amortization

1,636


1,879


2,095

Total operating expenses

55,046


58,056


56,703

Income from operations

25,313


31,441


25,691

Other income (expense), net (B)

518


(25)


1,754

Income before income taxes

25,831


31,416


27,445

Provision for income taxes (C)

8,780


36


8,332

Net income

$17,051


$31,380


$19,113







Net income per share:






Basic

$0.73


$1.27


$0.77

Diluted

$0.71


$1.25


$0.76







Shares used in computation:






Basic

23,462


24,697


24,688

Diluted

23,961


25,167


25,268




(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


Dec. 31,


Oct. 1,


Jan. 1,


2011


2011


2011

Cost of sales

$369


$374


$244

Research & development

393


390


337

Selling, general & administrative

3,260


2,676


2,342

Impact on income from operations

$4,022


$3,440


$2,923




For the quarters ended December 31, 2011, October 1, 2011 and January 1, 2011, the impact on net income, net of tax was $2,694 ($0.11 per diluted share), $2,489 ($0.10 per diluted share) and $2,248 ($0.09 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


Dec. 31,


Oct. 1,


Jan. 1,


2011


2011


2011

Cost of sales

$4


$(50)


$ 50

Research & development

19


(206)


195

Selling, general & administrative

116


(1,390)


1,495

Impact on income from operations

$139


$(1,646)


$1,740




For the quarters ended December 31, 2011, October 1, 2011 and January 1, 2011, the impact on other income (expense) net from gains or losses on deferred compensation plan assets was expense of $54, expense of $1,763 and income of $1,553, respectively.

(C) The fourth fiscal quarter 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 .



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



December 31,

2011


October 1,

2011

ASSETS




Current assets:




Cash, cash equivalents and short-term investments                    

$203,083


$220,203

Accounts receivable, net                                         

130,581


141,037

Inventories                                                     

148,047


152,385

Prepaid expenses and other assets                                 

75,579


67,021

Total current assets                                           

557,290


580,646

Property and equipment, net                                         

106,028


104,504

Other assets                                                     

154,811


158,116

Total assets                                                 

$818,129


$843,266





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Current portion of long-term obligations                              

$ 15


$ 15

Accounts payable                                               

35,379


39,841

Other current liabilities                                           

109,831


122,549

Total current liabilities                                          

145,225


162,405

Other long-term liabilities                                            

63,580


62,860

Total stockholders' equity                                           

609,324


618,001

Total liabilities and stockholders' equity                             

$818,129


$843,266




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



Three Months Ended


December 31,

2011


October 1,

2011


January 1,

2011


GAAP net income

$17,051


$31,380


$19,113


Stock-related compensation expense

2,694


2,489


2,248


One-time tax expense (benefit)

--


(9,686)


--


Non-GAAP net income

$19,745


$24,183


$21,361









Non-GAAP net income per diluted share

$  0.82


$  0.96


$  0.85





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 customer sentiment, the interest in and impact of OLED televisions and the timing of any shipments thereof, the outlook of semiconductor equipment manufacturers, timing of credit availability in China, demand in the materials processing and advanced packaging and interconnects markets, as well as the position of the Company and its products in such markets. 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 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 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, government economic policies in China and other regions of the world 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.

For further information: Leen Simonet of Coherent, Inc., +1-408-764-4161, @coherent

Please Read Before Continuing

Risk factors: Except for the historical information contained here, many of the matters discussed in this Web site are forward-looking statements, based on expectations at the time they were made, that involve risks and uncertainties that could cause our results to differ materially from those expressed or implied by such statements. These risks are detailed in the “Factors That May Affect Future Results” section of our latest 10-K or 10-Q filing. Coherent assumes no obligation to update these forward-looking statements.


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