Other Coherent News Releases

​Investor News Releases

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

SANTA CLARA, Calif., Nov. 10, 2020 /PRNewswire/ -- Coherent, Inc. (NASDAQ: COHR), one of the world's leading providers of lasers, laser-based technologies and laser-based system solutions in a broad range of scientific, commercial and industrial applications, today announced financial results for its fourth fiscal quarter and fiscal year ended October 3, 2020.

FINANCIAL HIGHLIGHTS


Three Months Ended


Year Ended


Oct. 3, 2020


Jul. 4, 2020


Sep. 28, 2019


Oct. 3, 2020


Sep. 28, 2019

GAAP Results










(in millions except per share data)









Net sales

$

316.8



$

298.3



$

335.5



$

1,229.0



$

1,430.6


Net income (loss)

$

7.7



$

(8.7)



$

0.6



$

(414.1)



$

53.8


Diluted EPS

$

0.32



$

(0.36)



$

0.03



$

(17.18)



$

2.22












Non-GAAP Results










(in millions except per share data)









Net income

$

24.5



$

12.6



$

21.4



$

72.6



$

143.8


Diluted EPS

$

1.01



$

0.52



$

0.89



$

3.00



$

5.92


FOURTH FISCAL QUARTER AND FISCAL YEAR DETAILS

For the fourth fiscal quarter ended October 3, 2020, Coherent announced net sales of $316.8 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $7.7 million, or $0.32 per diluted share.

These results compare to net sales of $335.5 million and net income of $0.6 million, or $0.03 per diluted share, for the fourth quarter of fiscal 2019, and net sales of $298.3 million and net loss of $8.7 million, or $0.36 per diluted share, for the third quarter of fiscal 2020.

Non-GAAP net income for the fourth quarter of fiscal 2020 was $24.5 million, or $1.01 per diluted share.  Non-GAAP net income for the fourth quarter of fiscal 2019 was $21.4 million, or $0.89 per diluted share. Non-GAAP net income for the third quarter of fiscal 2020 was $12.6 million, or $0.52 per diluted share. Reconciliations of GAAP to non-GAAP financial measures for the three months ended October 3, 2020, July 4, 2020, and September 28, 2019 and for the fiscal years ended October 3, 2020 and September 28, 2019 appear in the financial statements portion of this release under the heading "Reconciliation of GAAP to Non-GAAP net income (loss)".

For the fiscal year ended October 3, 2020, Coherent posted net sales of $1,229.0 million and net loss on a GAAP basis of $414.1 million, or $17.18 per diluted share, compared to the prior year net sales of $1,430.6 million and net income on a GAAP basis of $53.8 million, or $2.22 per diluted share. The net loss for fiscal 2020 includes $424.3 million, net of tax, in non-cash goodwill and other impairment charges, primarily related to the impairment of all goodwill and certain long-lived assets in our Industrial Lasers & Systems segment in the second quarter. For the fiscal year ended October 3, 2020, Coherent posted net income on a non-GAAP basis of $72.6 million, or $3.00 per diluted share, compared to the prior year net income on a non-GAAP basis of $143.8 million, or $5.92 per diluted share.

Effective September 29, 2019, Coherent adopted ASC 842 - Lease Accounting and applied the new guidance to all leases existing as of the date of adoption. Coherent reported results for all quarters of fiscal 2020 that reflect the application of ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with its historical lease accounting.

"Our Q4 financial results demonstrated early progress in our good to great transformation. We grew bookings and revenue from Q3, and with many of the university and research facilities re-opening, the Scientific and OEM instrumentation markets were the key drivers in the quarter. Our focus on operational excellence and maintaining a strong balance sheet manifested itself in improved sequential margins and strong growth in our fiscal year end cash balance," said Andy Mattes, Coherent President and CEO. "I've now passed the six-month mark with the company and I continue to be energized by the number of opportunities in innovative markets like microelectronics, instrumentation, precision manufacturing, and aerospace & defense."

CONFERENCE CALL REMINDER

Coherent 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 and a transcript of management's prepared remarks can be accessed on the investor relations page of the company's website at investors.coherent.com. 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 investor relations page.

Summarized statement of operations information is as follows (unaudited, in thousands, except per share data):



Three Months Ended


Year Ended



Oct. 3, 2020


Jul. 4, 2020


Sep. 28, 2019


Oct. 3, 2020


Sep. 28, 2019












Net sales

$

316,751


$

298,330


$

335,464


$

1,228,999


$

1,430,640


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


204,518



203,053



227,069



818,125



944,175


Gross profit


112,233



95,277



108,395



410,874



486,465


Operating expenses:











Research & development(A)(B)(E) 


28,821



28,283



27,258



115,578



117,353


Selling, general & administrative(A)(B)(E)(F)


73,081



67,525



70,551



270,464



272,257


Goodwill and other impairment charges(G)








451,025




Amortization of intangible assets(C) 


616



643



2,012



3,987



13,760


Total operating expenses


102,518



96,451



99,821



841,054



403,370


Income (loss) from operations


9,715



(1,174)



8,574



(430,180)



83,095


Other income (expense), net(B)(E)


436



(4,282)



(5,258)



(12,543)



(23,047)


Income (loss) before income taxes


10,151



(5,456)



3,316



(442,723)



60,048


Provision (benefit) for income taxes (H)


2,462



3,252



2,692



(28,584)



6,223


Net income (loss)

$

7,689


$

(8,708)


$

624


$

(414,139)


$

53,825













Net income (loss) per share:











Basic

$

0.32


$

(0.36)


$

0.03


$

(17.18)


$

2.23


Diluted

$

0.32


$

(0.36)


$

0.03


$

(17.18)


$

2.22













Shares used in computations:











Basic


24,193



24,159



23,919



24,105



24,118


Diluted


24,360



24,159



24,118



24,105



24,279




(A) 

Stock-based compensation expense included in operating results is summarized below (all footnote amounts are unaudited, in thousands, except per share data):



Stock-based compensation expense


Three Months Ended


Year Ended



Oct. 3, 2020


Jul. 4, 2020


Sep. 28, 2019


Oct. 3, 2020


Sep. 28, 2019

Cost of sales

$

1,884


$

1,237


$

1,240


$

5,314


$

4,880


Research & development


1,554



1,469



763



4,478



2,990


Selling, general & administrative


10,273



11,680



7,928



34,995



28,596


Impact on income (loss)

$

13,711


$

14,386


$

9,931


$

44,787


$

36,466





For the fiscal quarters ended October 3, 2020, July 4, 2020, and September 28, 2019, the impact on net income (loss), net of tax was $11,485 ($0.47 per diluted share), $12,834 ($0.53 per diluted share), and $9,091 ($0.38 per diluted share), respectively. For the fiscal years ended October 3, 2020 and September 28, 2019, the impact on net income, net of tax was $39,147 ($1.61 per diluted share) and $31,520 ($1.30 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


Year Ended



Oct. 3, 2020


Jul. 4, 2020


Sep. 28, 2019


Oct. 3, 2020


Sep. 28, 2019

Cost of sales

$

28


$

14


$

80


$

150


$

27


Research & development


504



72



234



606



42


Selling, general & administrative


3,614



353



1,889



4,590



1,419


Impact on income (loss)

$

4,146


$

439


$

2,203


$

5,346


$

1,488





For the fiscal quarters ended October 3, 2020, July 4, 2020, and September 28, 2019, the impact on other income net from gains or losses on deferred compensation plan assets was income of $4,735, $687, and $2,146, respectively. For the fiscal years ended October 3, 2020 and September 28, 2019, the impact on other income net from gain or losses on deferred compensation plan assets was income of $6,351 and $1,335, respectively.



(C) 

Amortization of intangibles is included in cost of sales and operating expenses as summarized below:



Amortization of intangibles


Three Months Ended


Year Ended



Oct. 3, 2020


Jul. 4, 2020


Sep. 28, 2019


Oct. 3, 2020


Sep. 28, 2019

Cost of sales

$

2,346


$

2,304



11,723


$

26,141



47,700


Amortization of intangible assets


616



643



2,012



3,987



13,760


Impact on income (loss)

$

2,962


$

2,947


$

13,735


$

30,128


$

61,460





For the fiscal quarters ended October 3, 2020, July 4, 2020, and September 28, 2019, the impact on net income (loss), net of tax was $2,138 net of tax ($0.09 per diluted share), $2,139 net of tax ($0.09 per diluted share), and $9,832 net of tax ($0.41 per diluted share), respectively. For the fiscal years ended October 3, 2020 and September 28, 2019, the impact on net income (loss), net of tax was $21,879 net of tax ($0.90 per diluted share) and $43,950 net of tax ($1.81 per diluted share), respectively.



(D) 

For the fiscal year ended September 28, 2019, the impact of inventory step-up costs related to acquisitions was $456 ($353 net of tax ($0.01 per diluted share)).



(E) 

For the fiscal quarters ended October 3, 2020, July 4, 2020, and September 28, 2019, the impact of restructuring charges, net of a gain on the sales leaseback of a facility in the quarter ended October 3, 2020, was $129 ($226 net of tax ($0.01 per diluted share)), $518 ($397 net of tax ($0.02 per diluted share)), and $92 ($131 net of tax ($0.00 per diluted share)), respectively. For the fiscal years ended October 3, 2020 and September 28, 2019, the impact of restructuring charges, net of a gain on the sales leaseback of a facility in the fiscal year ended October 3, 2020, was $2,659 ($2,087 net of tax ($0.09 per diluted share)) and $22,721 ($16,021 net of tax ($0.66 per diluted share)), respectively.



(F) 

For the fiscal quarter ended July 4, 2020 and for the fiscal year ended October 3, 2020, selling, general & administrative expense includes an accelerated compensation charge for our former CEO of $941 ($732 net of tax ($0.03 per diluted share)).  For the fiscal years ended October 3, 2020 and September 28, 2019, selling, general & administrative expense includes a legal settlement related to an asset recovery of $1,365 ($1,106 net of tax ($0.05 per diluted share)) and $1,337 ($1,083 net of tax ($0.04 per diluted share)), respectively.



(G) 

For the fiscal year ended October 3, 2020, goodwill and other impairment charges included a $327,203 ($327,203 net of tax ($13.60 per diluted share)) charge for impairment of goodwill, a $121,350 ($94,651 net of tax ($3.90 per diluted share)) charge for impairment of long-lived assets, and a $2,472 ($2,472 net of tax ($0.10 per diluted share)) charge for impairment of an investment.



(H) 

The fiscal quarters ended October 3, 2020, July 4, 2020, and September 28, 2019 included a non-recurring income tax charge of $2,817 ($0.12 per diluted share), $5,261 ($0.21 per diluted share) and $1,720 ($0.07 per diluted share), respectively. The fiscal years ended October 3, 2020 and September 28, 2019 included non-recurring income tax net expense of $615 ($0.03 per diluted share) and $1,720 ($0.06 per diluted share), respectively. The fiscal quarters ended October 3, 2020, July 4, 2020, and September 28, 2019 included a charge of $149 ($0.00 per diluted share), a benefit of $51 ($0.00 per diluted share), and a benefit of $36 ($0.00 per diluted share) of excess tax charges (benefits) for employee stock-based compensation, respectively. The fiscal years ended October 3, 2020 and September 28, 2019 included $930 ($0.04 per diluted share) and $2,507 ($0.10 per diluted share) of excess tax benefits for employee stock-based compensation, respectively.

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



Oct. 3, 2020


Sep. 28, 2019

ASSETS





Current assets:





Cash, cash equivalents, restricted cash and short-term investments

$

476,369


$

306,745


Accounts receivable, net


220,289



267,553


Inventories


426,756



442,530


Prepaid expenses and other assets


88,250



77,993


Total current assets


1,211,664



1,094,821


Property and equipment, net


245,678



323,434


Other assets


370,154



664,914


Total assets

$

1,827,496


$

2,083,169







LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Short-term borrowings

$

16,817


$

14,863


Accounts payable


60,225



51,531


Other current liabilities


191,016



173,920


Total current liabilities


268,058



240,314


Other long-term liabilities


632,214



558,119


Total stockholders' equity


927,224



1,284,736


Total liabilities and stockholders' equity

$

1,827,496


$

2,083,169


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



Three Months Ended


Year Ended



Oct. 3, 2020


Jul. 4, 2020


Sep. 28, 2019


Oct. 3, 2020


Sep. 28, 2019

GAAP net income (loss)

$

7,689


$

(8,708)


$

624


$

(414,139)


$

53,825


Stock-based compensation expense


11,485



12,834



9,091



39,147



31,520


Amortization of intangible assets


2,138



2,139



9,832



21,879



43,950


Restructuring charges and other


226



1,129



131



2,819



16,021


Non-recurring tax expense (benefit)


2,817



5,261



1,720



615



1,720


Tax charge (benefit) from stock-based compensation
expense


149



(51)



(36)



(930)



(2,507)


Goodwill and other impairment/asset charges
(recoveries)








423,220



(1,083)


Purchase accounting step-up










353


Non-GAAP net income

$

24,504


$

12,604


$

21,362


$

72,611


$

143,799













Non-GAAP net income per diluted share

$

1.01


$

0.52


$

0.89


$

3.00


$

5.92


RISKS AND UNCERTAINTIES

This press release contains forward-looking statements, as defined under the Federal securities laws. These forward-looking statements include the statement in this press release that relates to confidence in the number of the Company's opportunities. 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. Coherent and its business, including the aforementioned forward-looking statements, are subject to risks and uncertainties, including, but not limited to, risks associated with the recovery of global and regional economies from the negative effects of the COVID-19 pandemic and related private and public sector measures; the impact of COVID-19 related matters on our business; global demand, acceptance and adoption of our products; the worldwide demand for flat panel displays and adoption of OLED for mobile displays; the pricing and availability of OLED displays; the demand for and use of our products in commercial applications; our ability to generate sufficient cash to fund capital spending or debt repayment; 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; 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 products; worldwide government economic policies, including trade relations between the United States and China; our ability to manage our expanded operations; our ability to successfully transfer the manufacturing of our High Power Fiber Lasers and related business and operations between facilities; our ability to successfully manage our planned site consolidation projects and other cost reduction programs and to achieve the related anticipated savings and improved operational efficiencies; and other risks identified in Coherent's SEC filings. Readers are encouraged to refer to the risk disclosures and critical accounting policies described in Coherent's Forms 10-K, 10-Q and 8-K, including the risks identified in today's financial press release, as applicable and as filed from time-to-time.

Founded in 1966, Coherent, Inc. is one of the world's leading providers of lasers, laser-based technologies and laser-based system solutions in a broad range of scientific, commercial and industrial customers. Our common stock is listed on the Nasdaq Global Select Market and is part of the Russell 1000 and Standard & Poor's MidCap 400 Index. For more information about Coherent, visit the company's website at www.coherent.com for product and financial updates.

5100 Patrick Henry Dr. . P. O. Box 54980, Santa Clara, California  95056–0980 . Telephone (408) 764-4000

SOURCE Coherent, Inc.

For further information: Kevin Palatnik, EVP & Chief Financial Officer, +1 (408) 764-4110, Kevin.Palatnik@coherent.com

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.


I have read the terms and conditions