SANTA CLARA, Calif., April 26 /PRNewswire-FirstCall/ -- Coherent, Inc.
(Nasdaq: COHR) today announced financial results for its second fiscal quarter
ended April 2, 2005, with sales of $131.2 million and income from continuing
operations of $19.6 million ($0.63 per diluted share). These results include
a tax benefit from the reversal of a deferred tax valuation allowance of $9.6
million ($0.31 per diluted share) relating to our Lambda Physik segment, and a
favorable adjustment of $0.3 million or $0.01 per diluted share, related to
our Lambda Physik segment's previously communicated decision to discontinue
future lithography investments.
Sales and net income for the corresponding prior year quarter were $125.8
million and $3.0 million ($0.10 per diluted share), respectively. In
comparison, the immediately preceding quarter's results were $126.0 million in
sales and a net income of $5.4 million ($0.17 per diluted share). The first
quarter 2005 results included a charge of $3.1 million ($0.10 per diluted
share) related to the discontinuance of future product development and
investments in the semiconductor lithography market within our Lambda Physik
segment and a tax benefit of $0.5 million ($0.02 per diluted share) related to
federal tax law changes.
Orders received during the quarter ended April 2, 2005 were $129.4
million, compared to a record high of $137.4 million in the same period last
year, and $128.6 million in the immediately preceding quarter. Backlog of
$155.3 million at April 2, 2005 compared to a backlog of $157.1 million at
January 1, 2005.
John Ambroseo, Coherent's President and Chief Executive Officer,
commented, "I'm pleased to report that Coherent has again delivered solid
financial results. In addition to expanding gross and operating profits, we
have posted another quarter of good cash generation from continuing
operations, thereby satisfying one of our key business metrics. Our
performance in the second quarter benefited from our market diversification as
well as our continued emphasis on operational efficiency."
Year-to-date sales of $257.2 million and net income of $25.0 million
($0.81 per diluted share) compared to the prior year period sales of $233.8
million and a net income of $3.2 million ($0.11 per diluted share). Orders
received for the six month period ended April 2, 2005 were $257.9 million,
compared to $264.2 million in orders received during the same period a year
ago.
Electro-Optics segment sales of $105.4 million for the three months ended
April 2, 2005 were 1% higher than sales during the comparable prior year
period and 4% higher than the three months ended January 1, 2005. Incoming
orders of $100.0 million decreased 8% from the second fiscal quarter of 2004,
and represent an increase of 3% from orders received in the immediately
preceding quarter. Sales and incoming orders for the six months ended April
2, 2005 were $206.3 million and $197.1 million, 6% higher and 9% lower,
respectively, than during the same period a year ago.
Lambda Physik segment sales of $25.8 million for the three months ended
April 2, 2005 represent an increase of 18% from the corresponding prior year
period, and a 3% gain from the immediately preceding quarter. Incoming orders
of $29.3 million for the second quarter of fiscal 2005 were 4% higher than the
second fiscal quarter of 2004, and represent a 7% decline from orders received
in the immediately preceding first fiscal quarter of 2005. Sales and incoming
orders for the six months ended April 2, 2005 were $50.9 million and $60.9
million, 30% and 26% higher, respectively, than the same period last year.
Ambroseo continued, "With respect to future demand, there are some
positive signs for products used in flat panel display manufacturing,
electronics packaging and materials processing. It is also noteworthy that
our Lambda segment turned the corner of profitability for the first time in
more than two years. This is a gratifying development and is another step in
Lambda's march towards operational and financial excellence."
Coherent to Restate Financials for Fiscal Years 2000 through 2004 and the
First Quarter of Fiscal 2005; Amounts Not Material in Any Fiscal Year and
Unrelated to Core Operations
Coherent also announced today that it will restate its financial
statements for fiscal years 2000 through 2004 and the first quarter of fiscal
2005 to correct its accounting for its deferred compensation plans. The
corrections are not material to the reported net income or loss for the
applicable fiscal years or the first quarter of fiscal 2005 and do not relate
to the core operations of the Company. The Company identified the accounting
error during the current quarter when the administration of the plans was
changed to a new third-party administrator. In 1999, the Company amended its
non-qualified deferred compensation plan (Plan) and introduced a new
investment structure whereby the then existing and future contributions to the
Plan were funded in Company-owned life insurance contracts. Since the change
in investment structure to Company-owned life insurance contracts, the Company
has accounted for the Plan by recording the participants' balances as a
liability equal to the obligation to the participants and the related asset
investments in the equivalent amount. As a result of the Company's review, it
was determined that the asset investments should have been recorded at the
cash surrender value of the insurance contracts; life insurance premiums
loads, policy fees, and cost of insurance that were paid from the asset
investments and gains and losses from the asset investments should have been
recorded by the Company as components of other income or expenses; and
increases in the obligation to the participants should have been recorded as
operating expenses. The Company has implemented enhanced procedures to
identify any potential issues that may arise associated with the accounting
for its deferred compensation plans.
The impact of the restatement for each of affected periods can be
summarized as follows (unaudited, in thousands except per share data):
Quarter Ended
Jan. 1, Fiscal Year Fiscal Year
2005 2004 2003
Net income (loss) as reported $5,391 $17,719 $(45,891)
Impact of accounting correction (3) (359) (255)
Net income (loss) as restated $5,388 $17,360 $(46,146)
Earnings per share (previously
reported):
Basic $0.18 $0.59 $(1.56)
Diluted $0.17 $0.58 $(1.56)
Accounting correction:
Basic $-- $(0.01) $(0.01)
Diluted $-- $(0.01) $(0.01)
Earnings per share (as restated):
Basic $0.18 $0.58 $(1.57)
Diluted $0.17 $0.57 $(1.57)
Fiscal Year Fiscal Year Fiscal Year
2002 2001 2000
Net income (loss) as reported $(68,968) $100,750 $69,937
Impact of accounting correction (1,145) (2,009) (761)
Net income (loss) as restated $(70,113) $98,741 $69,176
Earnings per share (previously
reported):
Basic $(2.40) $3.64 $2.77
Diluted $(2.40) $3.50 $2.56
Accounting correction:
Basic $(0.04) $(0.07) $(0.03)
Diluted $(0.04) $(0.07) $(0.03)
Earnings per share (as restated):
Basic $(2.44) $3.57 $2.74
Diluted $(2.44) $3.43 $2.53
Summarized statement of operations financial information is as follows
(unaudited, in thousands except per share data):
Three Months Ended Six Months Ended
Jan. 1, Apr. 3, Apr. 3,
April 2, 2005 2004 (A) April 2, 2004 (A)
2005 (restated) (restated) 2005 (restated)
Net sales $131,175 $126,022 $125,808 $257,197 $233,759
Cost of
sales (B) 72,688 74,444 74,260 147,132 140,860
Gross profit 58,487 51,578 51,548 110,065 92,899
Operating
expenses:
Research &
development
(B) 14,175 14,276 15,587 28,451 30,674
Selling,
general &
administrative
(B) 28,765 28,438 29,532 57,203 57,063
Restructuring,
impairment and
other charges (40) 300 -- 260 237
Intangibles
amortization 1,528 1,493 1,770 3,021 3,699
Total
operating
expenses 44,428 44,507 46,889 88,935 91,673
Income from
operations 14,059 7,071 4,659 21,130 1,226
Other income,
net (B) 790 907 408 1,697 2,673
Income from
continuing
operations
before income
taxes and
minority
interest 14,849 7,978 5,067 22,827 3,899
Provision
(benefit) for
income taxes
(C) (4,728) 2,770 2,418 (1,958) 1,359
Income from
continuing
operations
before minority
interest 19,577 5,208 2,649 24,785 2,540
Minority
interest (B) (D) -- 180 145 180 478
Income from
continuing
operations 19,577 5,388 2,794 24,965 3,018
Income from
discontinued
operations -- -- 218 -- 218
Net income $19,577 $5,388 $3,012 $24,965 $ 3,236
Net income per
diluted share:
Income from
continuing
operations $0.63 $0.17 $0.09 $0.81 $0.10
Income from
discontinued
operations,
net of income
taxes -- -- 0.01 -- 0.01
Net income $0.63 $0.17 $0.10 $0.81 $0.11
Shares used in
computation:
Diluted 31,112 30,867 30,551 30,991 30,442
All periods except for the three and six months ended April 2, 2005 have
been restated to reflect the correct accounting for the Company's deferred
compensation plans.
(A) The three months and six months ended April 3, 2004 represent a 14-
week and 27-week period, respectively.
(B) The quarter ended April 2, 2005, includes a $323 ($0.01 per diluted
share) reduction in charges to research and development associated with our
previously communicated decision to discontinue future product development and
investments in the semiconductor lithography market within our Lambda Physik
subsidiary. 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 & development includes $267;
selling, general and administrative includes $137 and other income (expense),
net includes $214 for the six months ended April 2, 2005.
(C) The quarter ended April 2, 2005, includes a tax benefit for the
reversal of a deferred tax valuation allowance permissible under Statement of
Financial Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes" of
$9,571 ($0.31 per diluted share) related to our Lambda Physik segment. 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 first quarter
of fiscal 2005.
(D) The elimination of minority interest during the quarter ended April
2, 2005 was due to the acquisition of the remaining outstanding shares of
Lambda Physik.
Summarized balance sheet information is as follows (unaudited, in thousands):
Apr. 2, Oct. 2,
2005 2004 (A)
(restated)
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $212,495 $170,734
Restricted cash, cash equivalents
and short-term investments (B) 15,411 15,343
Accounts receivable, net 90,301 96,825
Inventories 108,907 104,698
Prepaid expenses and other assets 55,954 62,572
Total current assets 483,068 450,172
Property and equipment, net 162,455 166,054
Restricted cash, cash equivalents and
short-term investments (B) 16,545 23,580
Other assets 135,974 117,520
Total assets $798,042 $757,326
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $13,360 $13,700
Accounts payable 17,226 17,648
Other current liabilities 74,586 73,181
Total current liabilities 105,172 104,529
Long-term obligations 13,961 14,215
Other long-term liabilities 52,613 54,530
Total stockholders' equity 626,296 584,052
Total liabilities and
stockholders' equity $798,042 $757,326
(A) Derived from audited financial statements for the year ended October
2, 2004, and restated to reflect the correct accounting for the Company's
deferred compensation plans.
(B) Represents cash, cash equivalents and short-term investments at
April 2, 2005 restricted under the Star notes payable arrangement ($30,360),
for close out costs associated with the purchase of the remaining outstanding
shares of Lambda Physik AG ($1,367) and other ($229).
Reconciliation of GAAP to Non-GAAP summarized statement of operations
(unaudited, in thousands except per share data, after-tax and net of minority
interest, as restated):
Three Months Ended Six Months Ended
April 2, Jan. 1, April 3 April 2, April 3
2005 2005 2004 2005 2004
GAAP net income $19,577 $5,388 $3,012 $24,965 $3,236
SFAS 109 favorable
impact due to
final step
acquisition and
the merger of
two internal
entities (9,571) -- -- (9,571) --
Charges associated
with discontinuing
future product
development and
investments in the
semiconductor
lithography market (323) 3,061 -- 2,738 --
Tax benefit related
to federal tax
law changes -- (479) -- (479) --
Non-GAAP net
income $9,683 $ 7,970 $ 3,012 $17,653 $ 3,236
Non-GAAP net
income per diluted
share $0.31 $0.26 $0.10 $0.57 $0.11
The Company's conference call scheduled for 1:30 p.m. PDT 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 as with respect to future demand,
positive signs for products used in flat panel display manufacturing,
electronics packaging and materials processing, and Lambda's march towards
operational and financial excellence 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 may provide non-GAAP financial measures (as defined by the SEC
in Regulation G) in our 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 8K, 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.
 back to top
Related links:
http://www.coherent.com
CONTACT:
Leen Simonet, +1-408-764-4161, for Coherent,
Inc.
|
