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Coherent, Inc. Reports Second Fiscal Quarter Results

SANTA CLARA, Calif., April 29, 2015 /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 second fiscal quarter ended April 4, 2015.

FINANCIAL HIGHLIGHTS


Three Months Ended


Six Months Ended


April 4, 2015


December 27, 2014


March 29, 2014


April 4, 2015


March 29, 2014


GAAP Results











(in millions except per share data)










Bookings

$

220.6



$

162.5



$

261.8



$

383.1



$

463.3



Net sales

$

203.7



$

200.6



$

199.2



$

404.3



$

392.8



Net income

$

18.4



$

17.4



$

15.3



$

35.8



$

27.0



Diluted EPS

$

0.74



$

0.69



$

0.61



$

1.43



$

1.08














Non-GAAP Results











(in millions except per share data)










Net income

$

23.4



$

21.9



$

20.4



$

45.3



$

37.5



Diluted EPS

$

0.94



$

0.87



$

0.82



$

1.81



$

1.50



SECOND FISCAL QUARTER DETAILS

For the second fiscal quarter ended April 4, 2015, Coherent announced net sales of $203.7 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $18.4 million, or $0.74 per diluted share.  These results compare to net sales of $199.2 million and net income of $15.3 million, or $0.61 per diluted share, for the second quarter of fiscal 2014.

Non-GAAP net income for the second quarter of fiscal 2015 was $23.4 million, or $0.94 per diluted share.  Non-GAAP net income for the second quarter of fiscal 2014 was $20.4 million, or $0.82 per diluted share. Reconciliations of GAAP to non-GAAP financial measures for the three months ended April 4, 2015, December 27, 2014 and March 29, 2014 appear in the financial statements portion of this release under the heading "Reconciliation of GAAP to Non-GAAP net income."

Net sales for the first quarter of fiscal 2015 were $200.6 million and net income, on a GAAP basis, was $17.4 million, or $0.69 per diluted share. Non-GAAP net income for the first quarter of fiscal 2015 was $21.9 million, or $0.87 per diluted share.

Bookings received during the second fiscal quarter ended April 4, 2015 were $220.6 million. This result compares to bookings of $261.8 million in the same prior year period and $162.5 million in the immediately preceding quarter. 

The book-to-bill ratio was 1.08, and ending backlog expected to ship in the next 12 months was $315.3 million at April 4, 2015, compared to a backlog of $295.9 million at December 27, 2014 and a backlog of $303.8 million at March 29, 2014.

"We are pleased by the solid results in our second quarter including the acceleration in demand across our commercial markets.  Our FPD business picked up with new system and higher service orders.  The outlook in FPD is strong and we expect a number of new system orders over the next few quarters," stated John Ambroseo, Coherent's President and Chief Executive Officer.  "Orders in other commercial areas were very encouraging.  The via drilling market continues to improve and we received multiple volume orders for our J-Series Hornet™ laser and have more opportunities on the horizon.  The bioinstrumentation and medical OEM market posted record orders. Instrumentation customers' confidence grew and they reverted to longer-term purchases, primarily for our OBIS™ portfolio.  The medical OEM market was very robust for ophthalmic (cataract and disease management), home-based aesthetic, dental and medical consumables (disposable fibers)," Ambroseo added.

Coherent ended the quarter with cash, cash equivalents and short term investments of $344.4 million, an increase of $21.5 million from cash, cash equivalents and short term investments of $323.0 million at December 27, 2014.

On July 25, 2014, the Board of Directors authorized a buyback program whereby the Company was authorized to repurchase up to $25.0 million of its common stock from time to time through July 31, 2015. During the first and second quarters of fiscal 2015, the Company repurchased and retired outstanding common stock for a total of $17.3 million and $7.7 million, respectively, completing this program.

On January 21, 2015, the Board of Directors authorized an additional stock repurchase program to repurchase up to $25 million of the Company's outstanding common stock through January 31, 2016. No repurchases have been made under this program to date.

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 http://www.coherent.com/Investors/. For those who are not able to listen to the live broadcast, the call will be archived for approximately three months on the company's website.  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


Six Months Ended


April 4, 2015


December 27, 2014


March 29, 2014


April 4, 2015


March 29, 2014











Net Sales

$

203,721



$

200,615



$

199,222



$

404,336



$

392,778


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

120,417



118,296



118,557



238,713



234,567


Gross profit

83,304



82,319



80,665



165,623



158,211


Operating expenses:










Research & development (A)(B)

21,024



19,173



20,413



40,197



41,350


Selling, general & administrative (A)(B)

39,482



38,141



39,296



77,623



79,187


Amortization of intangible assets (C)

666



696



916



1,362



1,850


Total operating expenses

61,172



58,010



60,625



119,182



122,387


Income from operations

22,132



24,309



20,040



46,441



35,824


Other income (expense), net (B)

1,990



(685)



1,040



1,305



820


Income before income taxes

24,122



23,624



21,080



47,746



36,644


Provision for income taxes(D)

5,709



6,194



5,773



11,903



9,634


Net income

$

18,413



$

17,430



$

15,307



$

35,843



$

27,010












Net income per share:










Basic

$

0.75



$

0.70



$

0.62



$

1.44



$

1.10


Diluted

$

0.74



$

0.69



$

0.61



$

1.43



$

1.08












Shares used in computations:










Basic

24,709



24,936



24,782



24,823



24,662


Diluted

24,891



25,197



25,044



25,042



24,980


 

(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


Six Months Ended


April 4, 2015

December 27, 2014

March 29, 2014


April 4, 2015

March 29, 2014

Cost of sales

$

676


$

597


$

648



$

1,273


$

1,186


Research & development

556


330


500



886


1,022


Selling, general & administrative

3,550


3,463


3,524



7,013


7,332


Impact on income from operations

$

4,782


$

4,390


$

4,672



$

9,172


$

9,540


 


For the quarters ended April 4, 2015, December 27, 2014 and March 29, 2014, the impact on net income, net of tax was $3,479 ($0.14 per diluted share), $3,960 ($0.16 per diluted share) and $3,346 ($0.13 per diluted share), respectively. For the six months ended April 4, 2015 and March 29, 2014, the impact on net income, net of tax was $7,439 ($0.30 per diluted share) and $6,875 ($0.28 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

Three Months Ended


Six Months Ended


April 4, 2015

December 27, 2014

March 29, 2014


April 4, 2015

March 29, 2014

Cost of sales

$

21


$

14


$

29



$

35


$

97


Research & development

77


83


123



160


419


Selling, general & administrative

598


428


746



1,026


2,569


Impact on income from operations

$

696


$

525


$

898



$

1,221


$

3,085


 


For the quarters ended April 4, 2015, December 27, 2014 and March 29, 2014, the impact on other income (expense) net from gains or losses on deferred compensation plan assets was income of $724, $449 and $1,335, respectively. For the six months ended April 4, 2015 and March 29, 2014, the impact on other income (expense) net from gains or losses on deferred compensation plan assets was income of $1,173 and $3,266, respectively.

(C)

For the quarters ended April 4, 2015, December 27, 2014 and March 29, 2014, the impact of amortization of intangible assets was $2,036 ($1,540 net of tax ($0.06 per diluted share)), $2,180 ($1,607 net of tax ($0.06 per diluted share)) and $2,434 ($1,763 net of tax ($0.07 per diluted share)), respectively. For the six months ended April 4, 2015 and March 29, 2014, the impact of amortization of intangible assets was $4,216 ($3,147 net of tax ($0.13 per diluted share)) and $4,879 ($3,586 net of tax ($0.14 per diluted share)), respectively.

(D)

The quarter ended December 27, 2014 included $1,118 ($0.04 per diluted share) non-recurring tax benefit from the renewal of the R&D tax credit for fiscal 2014.

 

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

 


April 4, 2015


September 27, 2014

ASSETS




Current assets:




Cash, cash equivalents and short-term investments

$

344,434



$

318,275


Accounts receivable, net

124,227



137,324


Inventories

153,659



170,483


Prepaid expenses and other assets

62,370



54,973


Total current assets

684,690



681,055


Property and equipment, net

100,903



107,424


Other assets

189,400



210,896


Total assets

$

974,993



$

999,375






LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

31,949



$

32,784


Other current liabilities

100,195



84,535


Total current liabilities

132,144



117,319


Other long-term liabilities

52,364



62,407


Total stockholders' equity

790,485



819,649


Total liabilities and stockholders' equity

$

974,993



$

999,375


 

Reconciliation of GAAP to Non-GAAP net income (unaudited, in thousands (other than per share data), net of tax):

 


Three Months Ended


Six Months Ended


April 4, 2015

December 27, 2014

March 29, 2014


April 4, 2015

March 29, 2014

GAAP net income

$

18,413


$

17,430


$

15,307



$

35,843


$

27,010


Stock-related compensation expense

3,479


3,960


3,346



7,439


6,875


Amortization of intangible assets

1,540


1,607


1,763



3,147


3,586


Non-recurring tax benefit


(1,118)




(1,118)



Non-GAAP net income

$

23,432


$

21,879


$

20,416



$

45,311


$

37,471









Non-GAAP net income per diluted share

$

0.94


$

0.87


$

0.82



$

1.81


$

1.50


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 the Company's outlook for our flat panel display market products, timing for orders, the Company's opportunities in the via drilling market and for future orders of the Company's products. 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, the worldwide demand for flat panel displays, the demand for and use of the Company's products in commercial applications, our successful implementation of our customer design wins, our and our customers' exposure to risks associated with worldwide economic conditions, our customers' ability to cancel long-term purchase orders, 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 www.coherent.com for product and financial updates.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/coherent-inc-reports-second-fiscal-quarter-results-300074474.html

SOURCE Coherent, Inc.

For further information: For Release: Leen Simonet, (408) 764-4110

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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