SANTA CLARA, Calif., Nov. 3 /PRNewswire-FirstCall/ -- Coherent, Inc.
(Nasdaq: COHR) today announced financial results for its fourth fiscal quarter
ended October 2, 2004 with sales of $133.2 million and income from continuing
operations of $9.8 million ($0.32 per diluted share). Fourth quarter results
included a $3.2 million ($2.0 million after-tax or $0.07 per diluted share)
recovery on the sale of a note receivable.
Sales and net loss from continuing operations for the corresponding prior
year quarter were $101.5 million and $25.7 million ($0.86 per diluted share),
respectively. In comparison, sales for the immediately preceding quarter's
results were $128.0 million and income from continuing operations was $5.2
million ($0.17 per diluted share), which included a gain of $0.7 million
($0.02 per diluted share) from the sale of certain technology.
Orders received during the quarter ended October 2, 2004 were
$132.7 million, representing a 27% increase over the prior year quarter and a
6% increase from orders received in the immediately preceding quarter.
Backlog of $154.6 million at October 2, 2004 compared to a backlog of $155.1
million at July 3, 2004 and $127.7 million at September 27, 2003.
John Ambroseo, Coherent's President and Chief Executive Officer commented,
"During the past fiscal year we delivered strong results with sales increasing
by 22% and orders up 29% over the prior year. These results are directly
attributable to the strategic investments in research and development and
acquisitions made over the preceding 24 months. Our greater profitability
also benefited from improved operating efficiencies and better leverage of our
infrastructure. For the most recent quarter, we recognized higher bookings in
both business segments on a sequential basis. The resiliency in our order
stream is a direct result from design wins in leading edge applications."
Year-to-date sales of $495.0 million and net income of $17.7 million
($0.58 per diluted share) compared to the prior year sales of $406.2 million
and a net loss of $45.9 million ($1.56 per share). Orders received for the
twelve month period ended October 2, 2004 were $521.8 million, representing a
29% increase over orders received in the same period last year.
Electro-Optics segment sales of $109.2 million for the three months ended
October 2, 2004 were 30% higher than sales during the comparable prior year
period and increased 4% from the three months ended July 3, 2004. Incoming
orders of $108.7 million represent a 22% improvement over the fourth fiscal
quarter of 2003 and an increase of 5% from orders received in the immediately
preceding quarter. Sales and incoming orders for fiscal year 2004 were $409.3
million and $427.9 million, 26% and 27% higher, respectively, than during
fiscal year 2003.
Lambda Physik segment sales of $24.0 million for the three months ended
October 2, 2004 represent a 35% increase from the corresponding prior year
period and a 7% increase from the immediately preceding quarter. Incoming
orders of $24.0 million for the fourth quarter of fiscal 2004 were 52% higher
than the fourth fiscal quarter of 2003 and represent a 12% increase in orders
from the immediately preceding third fiscal quarter. Sales and incoming
orders for the fiscal year ended October 2, 2004 were $85.7 million and $93.9
million, respectively, and were 5% higher and 39% higher than during fiscal
year 2003.
Ambroseo continued, "Coherent has seeded its markets during the past year
and these applications are poised to exhibit growth. We will continue to
focus on fundamentals that should allow us to drive margin expansion and
increase profitability into fiscal year 2005 and beyond."
Summarized statement of operations financial information is as follows
(unaudited, in thousands except per share data):
Three Months Ended Year Ended
Oct. 2, July 3, Sept. 27, Oct. 2, Sept. 27,
2004 2004 2003 2004(A) 2003(A)
Net sales(B) $133,244 $127,951 $101,519 $494,954 $406,235
Cost of
sales(C) 73,679 72,964 71,134 287,395 257,467
Gross profit 59,565 54,987 30,385 207,559 148,768
Operating
expenses:
Research and
development 16,512 15,505 14,124 62,476 50,751
In-process
research
and
development(D) -- -- 1,908 -- 6,338
Selling,
general and
admini-
strative(E) 29,585 28,626 28,905 113,301 103,929
Restructuring,
impairment
and other
charges(F) (3,348) 18 12,052 (3,093) 35,163
Intangibles
amortization 1,495 1,504 1,968 6,698 5,147
Total
operating
expenses 44,244 45,653 58,957 179,382 201,328
Income (loss)
from
operations 15,321 9,334 (28,572) 28,177 (52,560)
Other income
(expense),
net(G) (920) 350 (210) 22 (4,854)
Income (loss)
from
continuing
operations
before income
taxes and
minority
interest 14,401 9,684 (28,782) 28,199 (57,414)
Provision
(benefit) for
taxes(H) 4,616 4,261 253 10,890 (6,640)
Income (loss)
from
continuing
operations
before
minority
interest 9,785 5,423 (29,035) 17,309 (50,774)
Minority
interest(B) (17) (269) 3,344 192 4,241
Income (loss)
from
continuing
operations 9,768 5,154 (25,691) 17,501 (46,533)
Income from
discontinued
operations -- -- 642 218 642
Net income
(loss) $9,768 $5,154 $(25,049) $17,719 $(45,891)
Earnings per
share, diluted:
Income (loss)
from
continuing
operations $0.32 $0.17 $(0.86) $0.57 $(1.58)
Income from
discontinued
operations -- -- 0.02 0.01 0.02
Net income
(loss) $0.32 $0.17 $(0.84) $0.58 $(1.56)
Shares used in
computation:
Basic 30,351 30,243 29,857 30,179 29,448
Diluted 30,673 30,620 29,857 30,544 29,448
(A) The fiscal year ended October 2, 2004 includes 53 weeks while the
fiscal year ended September 27, 2003 includes 52 weeks.
(B) The quarters ended October 2, 2004 and July 3, 2004 include $1,762 and
$2,181 of net sales, respectively, from an entity consolidated under
FIN 46R. This entity's net income for the corresponding periods of
$135 and $380, respectively, were eliminated through minority
interest. Our future results will not include the results of this
entity as we have sold our interest in the entity.
(C) Cost of sales in the quarter ended March 29, 2003 included an
additional inventory reserve requirement of $2,743 ($1,220 after-tax
and net of minority interest ($0.04 per diluted share)) due to lower
forecasted outlook in Lambda Physik's lithography business.
(D) In-process research and development expense for the quarter ended
September 27, 2003 includes a $1,908 ($0.06 per diluted share) charge
related to our purchase of 33.9% of the outstanding shares of Lambda
Physik AG. In-process research and development expense for the
quarter ended June 28, 2003 includes a $4,430 ($0.15 per diluted
share) charge related to the purchase of Positive Light, Inc. in April
2003.
(E) Includes $2,538 ($1,327 after-tax and net of minority interest ($0.04
per diluted share)) of severance costs incurred by Lambda Physik in
the quarter ended September 27, 2003.
(F) Includes a $3,241 ($2,002 after-tax ($0.07 per diluted share))
recovery on the sale of a previously impaired note receivable in the
quarter ended October 2, 2004. The quarter ended September 27, 2003
includes an additional $746 ($448 after-tax ($0.02 per diluted share))
charge primarily related to the previously communicated termination of
activities in the Telecom Actives Group, $9,613 ($7,967 after-tax
($0.27 per diluted share)) for the impairment of long-lived assets
related to excess manufacturing capacity and $1,693 ($1,016 after-tax
($0.03 per diluted share)) of lease termination costs. Goodwill
impairment charges in the quarter ended March 29, 2003 were $2,358
($1,769 net of minority interest ($0.06 per diluted share)). The
quarter ended December 29, 2002 includes a $13,378 ($8,288 after-tax
($0.28 per diluted share)) charge related to the termination of
activities in the Telecom Actives Group, a $3,060 ($2,672 after tax
($0.09 per diluted share)) charge related to our exit from the passive
telecom market and a $3,723 ($2,306 after-tax ($0.08 per diluted
share)) allowance against a note receivable.
(G) The fiscal year ended September 27, 2003 includes a one-time gain of
$1,479 ($0.05 per diluted share) related to the sale of 5.2 million
shares of Lumenis, Ltd, a $4,400 ($1,953 after-tax and net of minority
interest ($0.07 per diluted share)) settlement fee related to the
cancellation of a customer contract received by Lambda Physik and an
impairment charge on the Lumenis shares held by Coherent of $10,212
($10,212 after-tax ($0.35 per diluted share)).
(H) Included in the September 27, 2003 quarter end is a $5,566 after-tax
and net of minority interest ($0.19 per diluted share) charge related
to the establishment of a valuation allowance against Lambda Physik's
deferred tax assets and an income tax benefit of $1,203 ($0.04 per
diluted share) for refund of prior years' taxes. The June 28, 2003
quarter end includes a tax benefit related to a refund of prior year
taxes of $908 ($0.03 per diluted share).
Summarized balance sheet information is as follows
(unaudited, in thousands):
Oct. 2, Sept. 27,
2004 2003 (A)
ASSETS
Current assets:
Cash and short-term investments $170,734 $134,671
Restricted cash, cash equivalents
and short-term investments(B) 15,343 15,284
Short-term equity investments -- 277
Accounts receivable, net 96,825 73,118
Inventories 104,698 100,147
Prepaid expenses and other assets 62,572 75,485
Total current assets 450,172 398,982
Property and equipment, net 166,054 146,399
Restricted cash, cash equivalents
and short-term investments(B) 23,580 38,660
Other assets 122,049 125,324
Total assets $761,855 $709,365
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $13,700 $14,140
Accounts payable 17,648 17,632
Other current liabilities 73,181 69,341
Total current liabilities 104,529 101,113
Long-term obligations 14,215 27,911
Other long-term liabilities 54,530 36,483
Total stockholders' equity 588,581 543,858
Total liabilities and
stockholders' equity $761,855 $709,365
(A) Derived from audited financial statements for the year ended
September 27, 2003.
(B) Represents cash, cash equivalents and short-term investments
restricted under our notes payable arrangement ($30,360), for the
purchase of the remaining outstanding shares of Lambda Physik AG
($8,401) and other ($162) at October 2, 2004.
Reconciliation of GAAP to Non-GAAP summarized statement of operations
(unaudited, in thousands, after-tax and net of minority interest):
Three Months Ended Year Ended
Oct. 2, July 3, Sept. 27, Oct. 2, Sept. 27,
2004 2004 2003 2004 2003
GAAP net
income (loss) $9,768 $5,154 $(25,049) $17,719 $(45,891)
Recovery on
the sale of
note
receivable (2,002) -- -- (2,002) --
Sale of
technology -- (663) -- (663) --
Gain on
contract
settlements(1) -- -- -- -- (1,953)
Restructuring,
impairment
and other
charges (2) -- -- 9,431 142 24,466
Write-down of
Lumenis
investment -- -- -- -- 10,212
Discontinued
operations -- -- (642) (218) (642)
Tax benefit
for refunds
related to
prior years'
taxes -- -- (1,203) -- (2,111)
In-process
research and
development -- -- 1,908 -- 6,338
Gain on sale
of Lumenis
investment -- -- -- -- (1,479)
Lambda Physik
severance
costs(3) -- -- 1,327 -- 1,327
Deferred tax
asset
valuation
allowance(4) -- -- 5,566 -- 5,566
Non-GAAP net
income (loss) $7,766 $4,491 $(8,662) $14,978 $(4,167)
Non-GAAP net
income (loss)
per diluted
share $0.25 $0.15 $(0.29) $0.49 $(0.14)
(1) Net of minority interest of $(1,015)
(2) Net of minority interest of $589
(3) Net of minority interest of $349
(4) Net of minority interest of $2,238
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 Coherent has seeded its markets
during the past year and these applications are poised to exhibit growth and
we will continue to focus on fundamentals that should allow us to drive margin
expansion and increase profitability into fiscal year 2005 and beyond, 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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