SANTA CLARA, Calif., July 26 /PRNewswire-FirstCall/ -- Coherent, Inc.
(Nasdaq: COHR) today announced financial results for its third fiscal
quarter ended July 1, 2006, posting sales of $149.5 million and net income
of $10.9 million ($0.34 per diluted share). Net income for the third
quarter of fiscal 2006 included a $0.6 million ($0.02 per diluted share)
tax benefit resulting from increased use of tax credits and a charge of
$0.4 million ($0.01 per diluted share) in Excel Technology integration
related costs. Excluding the tax benefit and charge, non-GAAP net income
was $10.6 million ($0.34 per diluted share). GAAP net income for the third
quarter of fiscal 2006 also included approximately $2.3 million ($0.07 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
July 2, 2005 were $125.3 million and $9.6 million ($0.31 per diluted
share), respectively. These prior year results include a charge of $1.6
million ($0.05 per diluted share) for in-process research and development
(IPR&D) related to the purchase of TuiLaser AG and a $1.4 million ($0.05
per diluted share) tax benefit resulting from the increased use of tax
credits. Non-GAAP net income for the corresponding prior year, excluding
the aforementioned benefit and charge and including approximately $2.1
million ($0.07 per diluted share) of pro forma stock-based compensation
expense, net of tax, was $7.7 million ($0.24 per diluted share).
In comparison, sales for the second quarter of fiscal 2006 were $146.0
million and net income was $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 this 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 of July 1, 2006, fiscal year-to-date sales of $426.5 million and net
income of $28.3 million ($0.90 per diluted share) compared to the
corresponding prior year period sales of $382.5 million and net income of
$34.6 million ($1.11 per diluted share). Orders received for the nine month
period ended July 1, 2006 were $431.0 million, compared to $381.1 million
in orders received during the same period a year ago.
John Ambroseo, Coherent's President and Chief Executive Officer said,
"Our performance during our third fiscal quarter was solid. We continued to
drive higher sales while providing greater leverage to earnings through
gross margin expansion. In addition, our core markets remained robust as
order growth continued to outpace sales growth. Incoming orders included
initial bookings for a number of products released earlier in fiscal 2006."
Orders received during the quarter ended July 1, 2006 were $153.0
million, compared to $123.2 million in the same period last year, and
$146.3 million in the immediately preceding quarter. The book-to-bill ratio
was 1.02 resulting in a backlog of $199.1 million at July 1, 2006 compared
to a backlog of $163.9 million at July 2, 2005 and $191.5 million at April
1, 2006.
"Our healthy backlog combined with further margin improvements position
us well for our seasonally strong fourth fiscal quarter," Ambroseo added.
"We also look forward to successfully closing the German Federal Cartel
Office's review of our planned acquisition of Excel Technology, Inc., as
this transaction can provide meaningful benefits to customers and
shareholders alike. We will provide insight into our integration plans and
benefits after the deal closes."
Summarized statement of operations financial information is as follows
(unaudited, in thousands except per share data):
Three Months Ended Nine Months Ended
July 1, April 1, July 2, July 1, July 2,
2006 2006 2005 2006 2005
Net sales $149,524 $145,988 $125,259 $426,506 $382,466
Cost of sales (A)(B) 82,697 82,124 68,589 239,664 215,763
Gross profit 66,827 63,864 56,680 186,842 166,703
Operating expenses:
Research &
development (A)(B) 18,714 19,263 13,882 52,595 42,358
In-process research
and development -- -- 1,577 690 1,577
Selling, general &
administrative
(A)(B)(C)(D) 33,827 32,131 28,855 95,369 85,991
Restructuring and
other charges 187 (90) (360) 97 (100)
Intangibles
amortization 2,205 2,335 1,674 6,846 4,695
Total operating
expenses 54,933 53,639 45,628 155,597 134,521
Income from operations 11,894 10,225 11,052 31,245 32,182
Other income, net (B) 3,576 2,243 724 7,373 2,421
Income before income
taxes and minority
interest 15,470 12,468 11,776 38,618 34,603
Provision for income
taxes (E) 4,619 4,295 2,131 10,278 173
Income from operations
before minority
interest 10,851 8,173 9,645 28,340 34,430
Minority interest -- -- -- -- 180
Net income $10,851 $8,173 $9,645 $28,340 $34,610
Net income per share:
Basic $0.35 $0.27 $0.31 $0.92 $1.13
Diluted $0.34 $0.26 $0.31 $0.90 $1.11
Shares used in
computation:
Basic 30,868 30,754 30,856 30,915 30,655
Diluted 31,592 31,316 31,454 31,461 31,133
(A) The quarter ended July 1, 2006 includes $3,425 ($2,303 net of tax
($0.07 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: $422 to cost
of sales; $406 to research and development; and $2,597 to selling, general
and administrative. The nine months ended July 1, 2006 includes $9,645
($6,646 net of tax ($0.21 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: $740 to cost of sales; $1,486 to research and development; and
$7,419 to selling, general and administrative. 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.
(B) The nine months ended July 1, 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 July 1, 2006 includes $381 ($0.01 per diluted
share) of Excel Technology integration related costs. The quarter ended
April 1, 2006 includes $162 ($0.01 per diluted share) of Excel Technology
integration related costs.
(D) The nine months ended July 1, 2006 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 quarter ended July 1, 2006 includes a tax benefit of $604
($0.02 per diluted share) from increased use of tax credits. The nine
months ended July 1, 2006 includes a tax benefit of $2,355 ($0.07 per
diluted share) from increased use of tax credits. The quarter ended July 2,
2005 includes a tax benefit of $1,430 ($0.05 per diluted share) from
increased use of tax credits. The nine months ended July 2, 2005 includes a
tax benefit for the reversal of a deferred tax valuation allowance of
$9,571 ($0.31 per diluted share) related to our Lambda Physik business, a
tax benefit of $1,430 ($0.05 per diluted share) from increased use of tax
credits and a tax benefit of $479 ($0.02 per diluted share) related to
federal tax law changes enacted in the first quarter of fiscal 2005.
Summarized balance sheet information is as follows (unaudited, in
thousands):
July 1, Oct. 1,
2006 2005
ASSETS
Current assets:
Cash, cash equivalents and short-term investments (A) $463,432 $230,914
Restricted cash, cash equivalents and short-term
investments -- 15,467
Accounts receivable, net 102,657 87,684
Inventories 106,139 102,730
Prepaid expenses and other assets 72,583 54,926
Total current assets 744,811 491,721
Property and equipment, net 150,416 155,316
Restricted cash, cash equivalents and short-term
investments 2,742 1,220
Other assets 165,588 150,033
Total assets $1,063,557 $798,290
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $-- $12,736
Accounts payable 31,070 18,451
Other current liabilities 81,281 80,400
Total current liabilities 112,351 111,587
Other long-term liabilities 262,870 50,437
Total stockholders' equity 688,336 636,266
Total liabilities and stockholders' equity $1,063,557 $798,290
(A) Includes $195,000 net proceeds received from the issuance of
convertible subordinated notes in March 2006.
Reconciliation of GAAP to Non-GAAP summarized statement of operations
(unaudited, after-tax and net of minority interest, in thousands except per
share data):
Three Months Ended Nine Months Ended
July 1, April 1, July 2, July 1, July 2,
2006 2006 2005 2006 2005
GAAP net income $10,851 $8,173 $9,645 $28,340 $34,610
Excel Technology
integration costs 381 162 -- 543 --
In-process research and
development -- -- 1,577 429 1,577
Facility closure charge -- -- -- 403 --
Benefit from increased use
of tax credits (604) -- (1,430) (2,355) (1,430)
Tax benefit related to
federal tax law changes -- -- -- -- (479)
Pro forma stock based
compensation -- -- (2,131) -- (9,014)
Tax benefit from the reversal
of deferred tax valuation
allowance -- -- -- -- (9,571)
Charges associated with
discontinuing future product
development and investments
in the semiconductor
lithography market -- -- -- -- 2,738
Non-GAAP net income $10,628 $8,335 $7,661 $27,360 $18,431
Non-GAAP net income per
diluted share $0.34 $0.27 $0.24 $0.87 $0.59
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 our core markets
remained robust as order growth continues to outpace revenue growth, our
healthy backlog combined with further margin improvements position us well
for our seasonally strong fourth fiscal quarter, our looking forward to
successfully closing the German Federal Cartel Office's review of our
planned acquisition of Excel Technology, Inc., our belief that the Excel
transaction can provide meaningful benefits to customers and shareholders
alike, we are looking forward to the closing of the Excel acquisition and
our intent to provide insight into our integration plans after the
regulatory process is completed and, statements regarding our backlog, 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 Registrations Statement on Form S-3 (filed with the SEC on
July 10, 2006) in the 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 of Coherent, Inc.,
+1-408-764-4161
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