SANTA CLARA, Calif., Jan. 26 /PRNewswire-FirstCall/ -- Coherent, Inc.
(Nasdaq: COHR) today announced financial results for its first fiscal quarter
ended December 31, 2005, posting sales of $131.0 million and net income, on a
U.S. generally accepted accounting principles basis (GAAP), of $9.3 million
($0.30 per diluted share).
Net income for the first quarter of fiscal 2006 on a GAAP basis included a
one-time tax benefit of approximately $1.8 million ($0.06 per diluted share),
a previously communicated facility closure after-tax charge of $0.4 million
($0.01 per diluted share), and an after-tax in-process research and
development (IPR&D) charge of $0.4 million ($0.01 per diluted share)
associated with the purchase of the assets of Iolon, Inc. Excluding these
charges and gain, non-GAAP net income was $8.4 million ($0.27 per diluted
share). GAAP net income for the first quarter of fiscal 2006 also included
approximately $2.0 million ($0.06 per diluted share) of stock-based
compensation expense, net of tax, as required by Statement of Financial
Accounting Standards 123R (SFAS 123R). GAAP net income prior to fiscal 2006
did not include stock-based compensation expense under SFAS 123R.
Sales and GAAP net income for the first quarter of fiscal 2005 were
$126.0 million and $5.4 million ($0.17 per diluted share), respectively. GAAP
net income for the first quarter of fiscal 2005 included a charge of $3.1
million ($0.10 per diluted share) associated with discontinuing future product
development and investments in the semiconductor lithography market and a
$0.5 million ($0.02 per diluted share) tax benefit related to federal tax law
changes. Non-GAAP net income, excluding the aforementioned charge and gain
and including approximately $3.9 million ($0.13 per diluted share) of pro
forma stock-based compensation expense, net of tax, was $4.0 million
($0.13 per diluted share). In comparison, sales for the fourth fiscal quarter
ended October 1, 2005, were $133.8 million and GAAP net income was $5.3
million ($0.17 per diluted share). GAAP net income for the fourth fiscal
quarter ended October 1, 2005 included an after-tax charge of $4.1 million
($0.13 per diluted share) related to excess inventories as a result of
accelerated decommissioning of lithography lasers. Exclusive of this charge
and including pro forma stock-based compensation expense, net of tax, of
approximately $2.5 million ($0.08 per diluted share), non-GAAP net income for
the fourth quarter ended October 1, 2005 was $6.9 million ($0.22 per diluted
share).
Orders received during the three months ended December 31, 2005 of $131.7
million increased 2% from the same prior year period and decreased by 20%
compared to orders received in the immediately preceding quarter. The
book-to-bill ratio was 1.01 resulting in backlog of $192.8 million at December
31, 2005 compared to a backlog of $157.1 million at January 1, 2005.
"The first quarter exhibited typical seasonality, but that did not prevent
us from balancing investments and costs to deliver another solid bottom line
performance," commented John Ambroseo, Coherent's President and Chief
Executive Officer. "We remain optimistic for the balance of the fiscal year
following the release of several new products at this week's Photonics West
trade show, some encouraging signs from the microelectronics market and a very
healthy backlog. We are particularly bullish on new developments with our
patented OPS platform and the potential it holds for Coherent's future."
Ambroseo continued, "Since announcing a 1.5 million share repurchase
program at the end of September 2005, we purchased approximately 275,000
shares of our common stock through the end of December and approximately
500,000 shares to date. While this buyback program is an effective tool to
increase shareholder value, we remain committed to growing our core business."
Summarized statement of operations financial information is as follows
(unaudited, in thousands except per share data):
Three Months Ended
Dec. 31, Oct. 1, Jan. 1,
2005 2005 2005
Net sales $130,994 $133,786 $126,022
Cost of sales (A) (B) (C) 74,843 82,820 74,486
Gross profit 56,151 50,966 51,536
Operating expenses:
Research & development (A) (B) 14,618 15,187 14,301
In-process research and
development 690 -- --
Selling, general &
administrative (A) (B) (D) 29,411 29,836 28,371
Restructuring, impairment and
other charges (E) -- 39 300
Intangibles amortization 2,306 2,324 1,493
Total operating expenses 47,025 47,386 44,465
Income from operations 9,126 3,580 7,071
Other income, net (B) 1,554 3,248 907
Income before income taxes and
minority interest 10,680 6,828 7,978
Provision for income taxes (F) 1,364 1,577 2,770
Income before minority interest 9,316 5,251 5,208
Minority interest in subsidiaries'
losses -- -- 180
Net income $9,316 $5,251 $5,388
Net income per share:
Basic $0.30 $0.17 $0.18
Diluted $0.30 $0.17 $0.17
Shares used in computation:
Basic 31,124 31,056 30,482
Diluted 31,475 31,586 30,867
(A) The quarter ended December 31, 2005 includes $2,774 ($1,953 net of tax
($0.06 per diluted share)) of stock-based compensation expense related to
the implementation of SFAS 123R. Pretax stock-based compensation under
SFAS 123R is recorded in the statement lines as follows: $57 to cost of
sales; $448 to research and development; and $2,269 to selling, general
and administrative.
(B) The quarter ended January 1, 2005 includes a charge of $3,061 (net of
minority interest of $137 ($0.10 per diluted share)) associated with our
decision to discontinue future product development and investments in the
semiconductor lithography market within our Lambda Physik subsidiary. As
a result, cost of sales includes $2,257; research and development includes
$590; selling, general and administrative includes $137; and other income,
net includes $214 of this charge.
(C) The quarter ended October 1, 2005 includes a $4,129 ($0.13 per diluted
share) charge related to excess inventories as a result of the accelerated
decommissioning of lithography lasers from our Lambda Physik subsidiary.
The pretax charge of $6,813 is recorded in cost of sales.
(D) The quarter ended December 31, 2005 includes a previously communicated
facility closure charge of $403 ($0.01 per diluted share). The pretax
charge of $633 is recorded in selling, general and administrative.
(E) The quarter ended January 1, 2005 includes a charge of $300
($201 after-tax) related to the previously communicated termination of
activities in the Telecom Actives Group.
(F) The quarter ended December 31, 2005 includes a one-time tax benefit of
$1,751 ($0.06 per diluted share). The quarter ended January 1, 2005
includes a tax benefit of $479 ($0.02 per diluted share) related to
federal tax law changes enacted in the current quarter.
Summarized balance sheet information is as follows (unaudited, in
thousands):
Dec. 31, Oct. 1,
2005 2005
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $240,300 $230,914
Restricted cash, cash equivalents and
short-term investments (A) 15,463 15,467
Accounts receivable, net 84,332 87,684
Inventories 98,495 102,730
Prepaid expenses and other assets 49,417 54,926
Total current assets 488,007 491,721
Property and equipment, net 153,095 155,316
Restricted cash, cash equivalents and
short-term investments (A) 1,199 1,220
Other assets 158,188 150,033
Total assets $800,489 $798,290
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $12,735 $12,736
Accounts payable 21,310 18,451
Other current liabilities 65,965 80,400
Total current liabilities 100,010 111,587
Other long-term liabilities 58,680 50,437
Total stockholders' equity 641,799 636,266
Total liabilities and stockholders' equity $800,489 $798,290
(A) Represents cash, cash equivalents and short-term investments at
December 31, 2005 restricted under the Star Medical notes payable
arrangement ($15,178), for close out costs associated with the purchase of
the remaining outstanding shares of Lambda Physik AG ($1,199) and other
($285).
Reconciliation of GAAP to Non-GAAP summarized statement of operations
(unaudited, in thousands, after-tax and net of minority interest):
Three Months Ended
Dec. 31, Oct. 1, Jan. 1,
2005 2005 2005
GAAP net income $9,316 $5,251 $5,388
In-process research and development 429 -- --
Facility closure charge 403 -- --
One-time tax benefits (1,751) -- (479)
Pro forma stock based compensation -- (2,512) (3,922)
Charges associated with discontinuing
future product development and
investments in the semiconductor
lithography market (1) -- -- 3,061
Charges for excess Lithography
inventory -- 4,129 --
Non-GAAP net income $8,397 $6,868 $4,048
Non-GAAP net income per diluted share $0.27 $0.22 $ 0.13
(1) Net of minority interest of $137
The Company's conference call scheduled for 1:30 p.m. PT today will
include discussions relative to the current quarter results and some comments
regarding forward looking guidance on future operating performance.
The statements in this press release that relate to future plans, events
or performance, including statements such we remain optimistic for the balance
of the fiscal year following the release of several new products at this
week's Photonics West trade show, some encouraging signs from the
microelectronics market and a very healthy backlog; we are particularly
bullish on new developments with our patented OPS platform and the potential
it holds for Coherent's future; and we remain committed to growing our core
business, are forward-looking statements. Factors that could cause actual
results to differ materially include risks and uncertainties, including risks
associated to currency adjustments, contract cancellations, manufacturing
risks, competitive factors, and uncertainties pertaining to customer orders,
demand for products and services, and development of markets for the Company's
products and services and other risks identified in the Company's SEC filings.
Actual results, events and performance may differ materially. 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.
The Company has provided non-GAAP financial measures in this press release
and may provide non-GAAP financial measures (as defined by the SEC in
Regulation G) in its earnings conference call and in any other company
presentations during the quarter. Non-GAAP financial measures are intended to
supplement the user's overall understanding of the Company's current financial
performance and its future prospects. Any non-GAAP financial measures are not
intended to replace the Company's GAAP results. The Company's intention is to
include the most directly comparable GAAP financial measures and a
reconciliation of the differences between each non-GAAP financial measure used
and the most directly comparable GAAP financial measure.
Readers are encouraged to refer to the risk disclosures described in the
Company's reports on Forms 10-K, 10-Q and 8-K, as applicable.
Founded in 1966, Coherent, Inc. is a Standard & Poor's SmallCap 600
company and a world leader in providing photonics based solutions to the
commercial and scientific research markets. 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.
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Related links:
http://www.coherent.com
CONTACT:
Leen Simonet, +1-408-764-4161, for Coherent,
Inc.
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