SANTA CLARA, Calif., July 28 /PRNewswire-FirstCall/ -- Coherent, Inc.
(Nasdaq: COHR) today announced financial results for its third fiscal quarter
ended July 2, 2005, with sales of $125.3 million and net income of $9.6
million ($0.31 per diluted share). Net income included a charge of $1.6
million ($0.05 per diluted share) for in-process research and development
(IPR&D) related to our purchase of TuiLaser AG of Munich, Germany on June 13,
2005; a $1.4 million ($0.05 per diluted share) tax benefit resulting from
increased use of export tax incentives and R&D tax credits; and a $0.2 million
($0.01 per diluted share) favorable adjustment of a previously recognized
restructuring charge. Excluding the aforementioned items, non-GAAP earnings
represent $0.30 per diluted share.
Sales and net income for the corresponding prior year quarter were $128.0
million and $4.7 million ($0.15 per diluted share), respectively. Net income
in the comparable prior year period included a gain of $0.7 million ($0.02 per
diluted share) from the sale of certain technology. In comparison, the
immediately preceding quarter's results were sales of $131.2 million and net
income 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 ($0.01 per diluted share) related to our
Lambda Physik segment's previously communicated decision to discontinue future
lithography investments.
Orders received during the quarter ended July 2, 2005 were $123.2 million,
compared to $124.9 million in the same period last year, and $129.4 million in
the immediately preceding quarter. Backlog of $163.9 million at July 2, 2005
included backlog of $9.8 million from our acquisition of TuiLaser AG and
compared to a backlog of $155.3 million at April 2, 2005.
John Ambroseo, Coherent's President and Chief Executive Officer,
commented, "The team did a very good job executing against programs, which
enabled us to meet our earnings commitment despite lower than expected
revenues. The biggest contribution to earnings came from an expansion in the
Electro-Optic segment gross margin to 49%, which was fueled by initiatives to
grow that segment's margin by 200-400 basis points by November 2006. Our
backlog position and cash generation remain robust. Cash from continuing
operations was more than $24 million for the most recent quarter and is just
shy of $73 million year-to-date, surpassing fiscal 2004's full year total."
Year-to-date sales of $382.5 million and net income of $34.6 million
($1.11 per diluted share) compared to the prior year period sales of $361.7
million and net income of $8.0 million ($0.26 per diluted share). Orders
received for the nine month period ended July 2, 2005 were $381.1 million,
compared to $389.1 million in orders received during the same period a year
ago.
Electro-Optics segment sales of $101.2 million for the three months ended
July 2, 2005 were 4% lower than sales during the comparable prior year period
and three months ended April 2, 2005. Incoming orders of $101.1 million
decreased 2% from the third fiscal quarter of 2004, and represent an increase
of 1% from orders received in the immediately preceding quarter. Sales and
incoming orders for the nine months ended July 2, 2005 were $307.5 million and
$298.1 million, 2% higher and 7% lower, respectively, than during the same
period a year ago.
Lambda Physik segment sales of $24.0 million for the three months ended
July 2, 2005 represent an increase of 7% from the corresponding prior year
period, and a 7% decrease from the immediately preceding quarter. Incoming
orders of $22.1 million for the third quarter of fiscal 2005 were 3% higher
than the third fiscal quarter of 2004, and represent a 25% decline from orders
received in the immediately preceding second fiscal quarter of 2005, due
primarily to the timing of lithography service contracts and other customer
orders. Sales and incoming orders for the nine months ended July 2, 2005 were
$75.0 million and $83.0 million, 22% and 19% higher, respectively, than the
same period last year.
Ambroseo continued, "We are pleased to have completed the acquisition of
TuiLaser AG and its Bavarian Photonics subsidiary. The products and services
offered by these two entities will help fortify our position in several areas
including OEM medical, materials processing and microelectronics. In addition
to contributing to our market/technology roadmaps, the acquisition also offers
operational synergies, which will be realized in fiscal 2006."
Summarized statement of operations financial information is as follows
(unaudited, in thousands except per share data):
Three Months Ended Nine Months Ended
July 3, July 3,
July 2, April 2, 2004 July 2, 2004 (A)
2005 2005 (restated) 2005 (restated)
Net sales (B) $125,269 $131,175 $127,951 $382,466 $361,710
Cost of sales (C) 68,589 72,688 72,972 215,763 213,891
Gross profit 56,680 58,487 54,979 166,703 147,819
Operating expenses:
Research &
development (C) 13,882 14,175 15,519 42,358 46,229
In-process research
& development 1,577 -- -- 1,577 --
Selling, general &
administrative (C) 28,855 28,765 28,720 85,991 85,688
Restructuring,
impairment and
other charges (360) (40) 18 (100) 255
Intangibles
amortization 1,674 1,528 1,504 4,695 5,203
Total operating
expenses 45,628 44,428 45,761 134,521 137,375
Income from
operations 11,052 14,059 9,218 32,182 10,444
Other income,
net (C) (D) 724 790 17 2,421 2,690
Income from continuing
operations before
income taxes and
minority interest 11,776 14,849 9,235 34,603 13,134
Provision (benefit)
for income taxes (E) 2,131 (4,728) 4,222 173 5,581
Income from continuing
operations before
minority interest 9,645 19,577 5,013 34,430 7,553
Minority
interest (B) (C) -- -- (269) 180 209
Income from continuing
operations 9,645 19,577 4,744 34,610 7,762
Income from
discontinued
operations -- -- -- -- 218
Net income $9,645 $19,577 $4,744 $34,610 $7,980
Net income per
diluted share:
Income from
continuing
operations $0.31 $0.63 $0.15 $1.11 $0.25
Income from
discontinued
operations, net
of income taxes -- -- -- -- 0.01
Net income $0.31 $0.63 $0.15 $1.11 $0.26
Shares used in
computation:
Basic 30,856 30,628 30,243 30,655 30,122
Diluted 31,454 31,112 30,620 31,133 30,502
(A) The nine months ended July 3, 2004 represents a 40-week period.
(B) The quarter ended July 3, 2004 includes $2,181 of net sales from an
entity consolidated under FIN 46R. Additionally, this entity's net income of
$380 for the quarter ended July 3, 2004 was eliminated through minority
interest.
(C) 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 nine months ended July 2, 2005.
(D) The quarter ended July 3, 2004 includes a $1,200 ($663 after-tax
($0.02 per diluted share)) gain on the sale of certain technology.
(E) The quarter ended July 2, 2005, includes a tax benefit for increased
use of export tax incentives and R&D tax credits. The quarter ended April 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
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.
Summarized balance sheet information is as follows
(unaudited, in thousands):
Jul. 2, Oct. 2,
2005 2004 (A)
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $209,595 $170,734
Restricted cash, cash equivalents and
short-term investments (B) 15,466 15,343
Accounts receivable, net 81,529 96,825
Inventories 113,593 104,698
Prepaid expenses and other assets 65,139 62,572
Total current assets 485,322 450,172
Property and equipment, net 156,627 166,054
Restricted cash, cash equivalents and
short-term investments (B) 1,224 23,580
Other assets 144,564 117,520
Total assets $787,737 $757,326
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term
obligations $12,980 $13,700
Accounts payable 19,457 17,648
Other current liabilities 75,846 73,181
Total current liabilities 108,283 104,529
Long-term obligations 614 14,215
Other long-term liabilities 51,309 54,530
Total stockholders' equity 627,531 584,052
Total liabilities and stockholders'
equity $787,737 $757,326
(A) Derived from audited financial statements for the year ended
October 2, 2004, as restated to reflect the correct accounting for the
Company's deferred compensation plans.
(B) Represents cash, cash equivalents and short-term investments at July
2, 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 ($1,224) and other ($288).
Reconciliation of GAAP to Non-GAAP summarized statement of operations
(unaudited, in thousands, after-tax and net of minority interest):
Three Months Ended Nine Months Ended
July 2, April 2, July 3, July 2, July 3,
2005 2005 2004 2005 2004
GAAP net income $9,645 $19,577 $4,744 $34,610 $7,980
In-process research and
development 1,577 -- -- 1,577 --
Tax benefit for increased
use of export tax
incentives and R&D tax
credits (1,430) -- -- (1,430) --
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 --
Tax benefit related to
federal tax law changes -- -- -- (479) --
Sale of technology -- -- (663) -- (663)
Restructuring, impairment
and other charges (216) -- -- (216) 142
Discontinued operations -- -- -- -- (218)
Non-GAAP net income $9,576 $9,683 $4,081 $27,229 $7,241
Non-GAAP net income
per diluted share $0.30 $0.31 $0.13 $0.87 $0.24
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 the program to grow Electro-
Optics gross margins 200-400 basis points by November 2006; and the products
and services offered by TuiLaser AG and Bavarian Photonics will fortify our
position in several areas including OEM medical, materials processing and
microelectronics, and in addition to contributing to our market/technology
roadmaps, the acquisition also offers operational synergies, which will be
realized in fiscal 2006, 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.
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Related links:
http://www.coherent.com
CONTACT:
Leen Simonet of Coherent, Inc.,
+1-408-764-4161
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