SANTA CLARA, Calif., April 26 /PRNewswire-FirstCall/ -- Coherent, Inc.
(Nasdaq: COHR) today announced financial results for its second fiscal
quarter ended April 1, 2006, posting sales of $146.0 million and net
income, on a U.S. generally accepted accounting principles basis (GAAP), of
$8.2 million ($0.26 per diluted share). Net income for the second quarter
of fiscal 2006 on a GAAP basis included $0.2 million ($0.01 per diluted
share) in Excel Technology integration related costs. Excluding the charge,
non-GAAP net income was $8.3 million ($0.27 per diluted share). GAAP net
income for the second quarter of fiscal 2006 also included approximately
$2.4 million ($0.08 per diluted share) of stock-based compensation expense,
net of tax, as required by Statement of Financial Accounting Standards
123(R) (SFAS 123(R)). GAAP net income prior to fiscal 2006 did not include
stock-based compensation expense under SFAS 123(R).
Sales and net income for the corresponding prior year period ending
April 2, 2005 were $131.2 million and $19.6 million ($0.63 per diluted
share), respectively. These prior year period 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 Lambda Physik, and a favorable
adjustment of $0.3 million ($0.01 per diluted share) related to Lambda
Physik's previously communicated decision to discontinue future lithography
investments. Non-GAAP net income for the corresponding prior year,
excluding the aforementioned gains and including approximately $3.0 million
($0.10 per diluted share) of pro forma stock-based compensation expense,
net of tax, was $6.7 million ($0.22 per diluted share).
In comparison, sales for the first quarter of fiscal 2006 were $131.0
million and net income, on a GAAP basis, 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 of April 1, 2006, year-to-date sales of $277.0 million and net
income of $17.5 million ($0.56 per diluted share) compared to the prior
year period sales of $257.2 million and a net income of $25.0 million
($0.81 per diluted share). Orders received for the six month period ended
April 1, 2006 were $278.0 million, compared to $257.9 million in orders
received during the same period a year ago.
John Ambroseo, Coherent's President and Chief Executive Officer, said,
"We're very pleased by Coherent's operating results for the second fiscal
quarter. We successfully redistributed production capacity leading to
healthy top-line growth. Our gross margin expanded by 0.8 points from last
quarter, which positions us to achieve our goal of 46% gross margin exiting
fiscal 2006. We also delivered good cash generation from continuing
operations, making us three for three on these key business fundamentals."
Orders received during the quarter ended April 1, 2006 were $146.3
million, compared to $129.4 million in the same period last year, and
$131.7 million in the immediately preceding quarter. The book-to-bill ratio
was 1.00 resulting in a backlog of $191.5 million at April 1, 2006 compared
to a backlog of $155.3 million at April 2, 2005 and $192.8 million at
December 31, 2005.
Ambroseo continued, "Incoming orders were very strong in the second
quarter as we continue to reap rewards from our prior investments. In
particular, bookings from the microelectronics market were up significantly
on a sequential and year-over-year basis. The overall bookings performance
has enabled us to maintain a very strong backlog, which bodes well for
revenue and margin expansion for the remainder of the fiscal year."
"With our current business on a positive vector, we look forward to
completing our planned acquisition of Excel Technology, Inc. We are fully
cooperating with the Department of Justice's HSR investigation and
anticipate a successful resolution. We intend to provide insight into our
integration plans after the regulatory process is completed."
Summarized statement of operations financial information is as follows
(unaudited, in thousands except per share data):
Three Months Ended Six Months Ended
April 1, Dec. 31, April 2, April 1, April 2,
2006 2005 2005 2006 2005
Net sales $145,988 $130,994 $131,175 $276,982 $257,197
Cost of sales (A) (B) 82,124 74,843 72,688 156,967 147,173
Gross profit 63,864 56,151 58,487 120,015 110,024
Operating expenses:
Research &
development (A) (B) 19,263 14,618 14,175 33,881 28,476
In-process
research and
development - 690 - 690 -
Selling, general
& administrative
(A) (B) (C) (D) 32,131 29,411 28,765 61,542 57,137
Restructuring,
impairment and
other charges (E) (90) - (40) (90) 260
Intangibles
amortization 2,335 2,306 1,528 4,641 3,021
Total operating
expenses 53,639 47,025 44,428 100,664 88,894
Income from
operations 10,225 9,126 14,059 19,351 21,130
Other income,
net (B) 2,243 1,554 790 3,797 1,697
Income before
income taxes
and minority
interest 12,468 10,680 14,849 23,148 22,827
Provision (benefit)
for income taxes (F) 4,295 1,364 (4,728) 5,659 (1,958)
Income from operations
before minority
interest 8,173 9,316 19,577 17,489 24,785
Minority interest - - - - 180
Net income $8,173 $9,316 $19,577 $17,489 $24,965
Net income per share:
Basic $0.27 $0.30 $0.64 $0.57 $0.82
Diluted $0.26 $0.30 $0.63 $0.56 $0.81
Shares used in
computation:
Basic 30,754 31,124 30,628 30,939 30,555
Diluted 31,316 31,475 31,112 31,396 30,991
(A) The quarter ended April 1, 2006 includes $3,446 ($2,390 net of tax
($0.08 per diluted share)) of stock-based compensation expense related to
the implementation of SFAS 123(R). Pretax stock-based compensation under
SFAS 123(R) is recorded in the statement lines as follows: $261 to cost of
sales; $632 to research and development; and $2,553 to selling, general and
administrative. The quarter ended December 31, 2005 includes $2,774 ($1,953
net of tax ($0.06 per diluted share)) of stock-based compensation expense.
Pretax stock-based compensation 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 six months ended April 2, 2005 includes a charge of $2,738 (net
of minority interest of $137 ($0.09 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
$267; selling, general and administrative includes $137; and other income,
net includes $214 of this charge.
(C) The quarter ended April 1, 2006 includes $162 ($0.01 per diluted
share) of Excel Technology integration related costs.
(D) The quarter ended December 31, 2005 includes a previously
communicated facility closure charge of $403 ($0.01 per diluted share). The
pre-tax charge of $633 is recorded in selling, general and administrative.
(E) The six months ended April 2, 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 six months ended April 2, 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):
April 1, Oct. 1,
2006 2005
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments (A) $429,136 $230,914
Restricted cash, cash equivalents and
short-term investments (B) 15,469 15,467
Accounts receivable, net 99,005 87,684
Inventories 95,633 102,730
Prepaid expenses and other assets 59,937 54,926
Total current assets 699,180 491,721
Property and equipment, net 151,339 155,316
Restricted cash, cash equivalents and
short-term investments (B) 2,577 1,220
Other assets 164,751 150,033
Total assets $1,017,847 $798,290
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $12,737 $12,736
Accounts payable 24,365 18,451
Other current liabilities 70,820 80,400
Total current liabilities 107,922 111,587
Other long-term liabilities 261,301 50,437
Total stockholders' equity 648,624 636,266
Total liabilities and stockholders'
equity $1,017,847 $798,290
(A) Includes $195,000 net proceeds received from the issuance of
convertible subordinated notes in March 2006.
(B) Represents cash, cash equivalents and short-term investments at
April 1, 2006 restricted under the Star Medical notes payable arrangement
($15,178), for other long-term obligations ($1,350), for close out costs
associated with the purchase of the remaining outstanding shares of Lambda
Physik AG ($1,227) and other ($291).
Reconciliation of GAAP to Non-GAAP summarized statement of operations
(unaudited, in thousands, after-tax and net of minority interest):
Three Months Ended Six Months Ended
April 1, Dec. 31, April 2, April 1, April 2,
2006 2005 2005 2006 2005
GAAP net income $8,173 $9,316 $19,577 $17,489 $24,965
Excel Technology
integration costs 162 - - 162 -
In-process research
and development - 429 - 429 -
Facility closure
charge - 403 - 403 -
One-time tax
benefits - (1,751) - (1,751) -
Tax benefit related
to federal tax
law changes - - - - (479)
Pro forma stock
based compensation - - (2,961) - (6,883)
Tax benefit from the
reversal of deferred
tax valuation
allowance - - (9,571) - (9,571)
Charges associated
with discontinuing
future product
development and
investments in the
semiconductor
lithography market - - (323) - 2,738
Non-GAAP net
income $8,335 $8,397 $6,722 $16,732 $10,770
Non-GAAP net
income per
diluted share $0.27 $0.27 $0.22 $0.53 $0.35
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 as we continue to reap
rewards from our prior investments, that our strong backlog bodes well for
revenue and margin expansion for the remainder of the fiscal year and that
we anticipate a successful resolution to the Department of Justice
investigation into the Excel acquisition, 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.
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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