SANTA CLARA, Calif.,
Aug. 1, 2017 /PRNewswire/ -- Coherent, Inc. (NASDAQ,
COHR), one of the world's leading providers of lasers, laser-based
technologies and laser-based system solutions in a broad range of
scientific, commercial and industrial applications, today announced
financial results for its third fiscal quarter ended July 1,
2017.
|
FINANCIAL
HIGHLIGHTS
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
July 1,
2017
|
|
April 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
|
GAAP
Results
|
|
|
|
|
|
|
|
|
|
|
(in millions except
per share data)
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
464.1
|
|
|
$
|
422.8
|
|
|
$
|
218.8
|
|
|
$
|
1,233.0
|
|
|
$
|
608.9
|
|
|
Net income
|
$
|
61.1
|
|
|
$
|
41.8
|
|
|
$
|
18.7
|
|
|
$
|
133.4
|
|
|
$
|
56.7
|
|
|
Diluted
EPS
|
$
|
2.46
|
|
|
$
|
1.69
|
|
|
$
|
0.76
|
|
|
$
|
5.39
|
|
|
$
|
2.33
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Results
|
|
|
|
|
|
|
|
|
|
|
(in millions except
per share data)
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
83.4
|
|
|
$
|
72.1
|
|
|
$
|
26.2
|
|
|
$
|
218.8
|
|
|
$
|
75.4
|
|
|
Diluted
EPS
|
$
|
3.36
|
|
|
$
|
2.91
|
|
|
$
|
1.07
|
|
|
$
|
8.85
|
|
|
$
|
3.10
|
|
2017 THIRD FISCAL QUARTER DETAILS
For the third fiscal quarter ended July 1, 2017, Coherent
announced net sales of $464.1 million
and net income, on a U.S. generally accepted accounting principles
(GAAP) basis, of $61.1 million, or
$2.46 per diluted share. These
results compare to net sales of $218.8
million and net income of $18.7
million, or $0.76 per diluted
share, for the third quarter of fiscal 2016.
Non-GAAP net income for the third quarter of fiscal 2017 was
$83.4 million, or $3.36 per diluted share. Non-GAAP net
income for the third quarter of fiscal 2016 was $26.2 million, or $1.07 per diluted share. Reconciliations of GAAP
to non-GAAP financial measures for the three months ended
July 1, 2017, April 1, 2017 and July 2, 2016, and
the nine months ended July 1, 2017 and July 2, 2016
appear in the financial statements portion of this release under
the heading "Reconciliation of GAAP to Non-GAAP net income."
Net sales for the second quarter of fiscal 2017 were
$422.8 million and net income, on a
GAAP basis, was $41.8 million, or
$1.69 per diluted share. Non-GAAP net
income for the second quarter of fiscal 2017 was $72.1 million, or $2.91 per diluted share.
As previously announced, on November 7,
2016, Coherent completed its acquisition of Rofin-Sinar
Technologies, Inc. ("Rofin"), one of the world's leading developers
and manufacturers of high-performance industrial laser sources and
laser-based solutions and components. As a result, Rofin's
operating results were consolidated for the period from
November 7, 2016 through December 31, 2016 in Coherent's first fiscal
quarter results ended December 31,
2016, and a full quarter of Rofin's operating results in
Coherent's second and third fiscal quarter results ended
April 1, 2017 and July 1, 2017.
"We had another record-setting result in our most recent quarter
and demand remains buoyant. We booked a significant number of
large format (i.e., Gen 5 or Gen 6) ELA tools for OLED
manufacturing. Utilization within OLED fabs is very high and
with more installations moving into the service pool, ELA service
orders and revenues continue to climb. The outlook for FPD is
bright with multiple new fabs having been announced or in the late
stages of planning. These new fabs will drive business
predominantly in FY19 and beyond. We will be prepared to
satisfy the delivery schedule since we have started our previously
announced facility expansions. The overall materials
processing business continues to perform well. Most notably,
we had very good traction during Q3 for high-power (i.e., 1-8
kilowatts) fiber lasers in battery welding for electric vehicles
and metal cutting. The pipeline is strong and outstrips our
current capacity, which necessitates expansions in our diode
packaging and fiber laser integration and testing operations.
The additional capacity will be staged over the next year," said
John Ambroseo, Coherent's President
and Chief Executive Officer. "We had another quarter of
strong cash flow and we made a voluntary €45 million principal
prepayment on our debt. Using excess cash flow to pay down
the debt will remain a priority," Ambroseo added.
CONFERENCE CALL REMINDER
The Company will host a conference call today to discuss its
financial results at 1:30 P.M.
Pacific (4:30 P.M. Eastern).
A listen-only broadcast of the conference call and a transcript of
management's prepared remarks can be accessed on the Company's
website at http://www.coherent.com/Investors/. For those who are
not able to listen to the live broadcast, the call will be archived
for approximately three months on the Company's website.
Summarized statement of operations information is as follows
(unaudited, in thousands except per share data):
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
July 1,
2017
|
|
April 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
464,107
|
|
|
$
|
422,833
|
|
|
$
|
218,767
|
|
|
$
|
1,233,013
|
|
|
$
|
608,924
|
|
|
Cost of
sales(A)(B)(D)(E)(F)
|
256,921
|
|
|
243,318
|
|
|
124,208
|
|
|
704,798
|
|
|
341,868
|
|
|
Gross
profit
|
207,186
|
|
|
179,515
|
|
|
94,559
|
|
|
528,215
|
|
|
267,056
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Research &
development(A)(B)(F)
|
30,483
|
|
|
30,536
|
|
|
21,441
|
|
|
88,103
|
|
|
61,536
|
|
|
Selling, general
& administrative(A)(B)(E)(F)(G)
|
72,383
|
|
|
72,451
|
|
|
46,256
|
|
|
218,602
|
|
|
123,970
|
|
|
Gain from business
combination(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,416)
|
|
|
—
|
|
|
Amortization
of intangible assets(D)
|
3,743
|
|
|
5,439
|
|
|
574
|
|
|
13,060
|
|
|
1,975
|
|
|
Total operating
expenses
|
106,609
|
|
|
108,426
|
|
|
68,271
|
|
|
314,349
|
|
|
187,481
|
|
|
Income from
operations
|
100,577
|
|
|
71,089
|
|
|
26,288
|
|
|
213,866
|
|
|
79,575
|
|
|
Other income
(expense), net(B) (H)
|
(7,942)
|
|
|
(10,255)
|
|
|
852
|
|
|
(13,025)
|
|
|
(1,150)
|
|
|
Income from
continuing operations, before income taxes
|
92,635
|
|
|
60,834
|
|
|
27,140
|
|
|
200,841
|
|
|
78,425
|
|
|
Provision for income
taxes (I)
|
29,764
|
|
|
18,646
|
|
|
8,490
|
|
|
65,084
|
|
|
21,708
|
|
|
Net income from
continuing operations
|
62,871
|
|
|
42,188
|
|
|
18,650
|
|
|
135,757
|
|
|
56,717
|
|
|
Loss from
discontinued operations, net of income taxes
|
(1,754)
|
|
|
(343)
|
|
|
—
|
|
|
(2,387)
|
|
|
—
|
|
|
Net income
|
$
|
61,117
|
|
|
$
|
41,845
|
|
|
$
|
18,650
|
|
|
$
|
133,370
|
|
|
$
|
56,717
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic from continuing
operations
|
2.56
|
|
|
1.72
|
|
|
0.77
|
|
|
5.55
|
|
|
2.35
|
|
|
Basic from
discontinued operations
|
(0.07)
|
|
|
(0.01)
|
|
|
—
|
|
|
(0.10)
|
|
|
—
|
|
|
Basic earnings per
share
|
$
|
2.49
|
|
|
$
|
1.71
|
|
|
$
|
0.77
|
|
|
$
|
5.45
|
|
|
$
|
2.35
|
|
|
Diluted from
continuing operations
|
2.53
|
|
|
1.70
|
|
|
0.76
|
|
|
5.49
|
|
|
2.33
|
|
|
Diluted from
discontinued operations
|
(0.07)
|
|
|
(0.01)
|
|
|
—
|
|
|
(0.10)
|
|
|
—
|
|
|
Diluted earnings per
share
|
$
|
2.46
|
|
|
$
|
1.69
|
|
|
$
|
0.76
|
|
|
$
|
5.39
|
|
|
$
|
2.33
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computations:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
24,537
|
|
|
24,496
|
|
|
24,192
|
|
|
24,460
|
|
|
24,108
|
|
|
Diluted
|
24,823
|
|
|
24,757
|
|
|
24,467
|
|
|
24,741
|
|
|
24,355
|
|
|
(A)
|
Stock-based
compensation expense included in operating results is summarized
below (all footnote amounts are unaudited, in thousands, except per
share data):
|
|
|
|
Stock-based
compensation expense
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
July 1,
2017
|
|
April 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Cost of
sales
|
$
|
880
|
|
|
$
|
778
|
|
|
$
|
677
|
|
|
$
|
2,618
|
|
|
$
|
1,876
|
|
|
Research &
development
|
639
|
|
|
597
|
|
|
610
|
|
|
2,289
|
|
|
1,646
|
|
|
Selling, general
& administrative
|
5,373
|
|
|
5,308
|
|
|
4,402
|
|
|
18,323
|
|
|
11,299
|
|
|
Impact on income from
operations
|
$
|
6,892
|
|
|
$
|
6,683
|
|
|
$
|
5,689
|
|
|
$
|
23,230
|
|
|
$
|
14,821
|
|
|
|
|
For the quarters
ended July 1, 2017, April 1, 2017 and July 2, 2016,
the impact on net income, net of tax was $5,041 ($0.20 per diluted
share), $4,868 ($0.20 per diluted share) and $4,101 ($0.17 per
diluted share), respectively. For the nine months ended
July 1, 2017 and July 2, 2016, the impact on net income,
net of tax was $18,075 ($0.73 per diluted share) and $11,371 ($0.47
per diluted share), respectively.
|
|
|
|
(B)
|
Changes in deferred
compensation plan liabilities are included in cost of sales and
operating expenses while gains and losses on deferred compensation
plan assets are included in other income (expense), net.
Deferred compensation expense (benefit) included in operating
results is summarized below:
|
|
|
|
Deferred
compensation expense (benefit)
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
July 1,
2017
|
|
April 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Cost of
sales
|
$
|
53
|
|
|
$
|
69
|
|
|
$
|
69
|
|
|
$
|
123
|
|
|
$
|
35
|
|
|
Research &
development
|
163
|
|
|
308
|
|
|
330
|
|
|
496
|
|
|
166
|
|
|
Selling, general
& administrative
|
1,014
|
|
|
1,430
|
|
|
1,619
|
|
|
2,382
|
|
|
836
|
|
|
Impact on income from
operations
|
$
|
1,230
|
|
|
$
|
1,807
|
|
|
$
|
2,018
|
|
|
$
|
3,001
|
|
|
$
|
1,037
|
|
|
|
|
For the quarters
ended July 1, 2017, April 1, 2017 and July 2, 2016,
the impact on other income (expense), net from gains or losses on
deferred compensation plan assets was income of $1,204, income of
$1,812 and income of $1,867, respectively. For the nine months
ended July 1, 2017 and July 2, 2016, the impact on other
income (expense) net from gains or losses on deferred compensation
plan assets was income of $3,027 and income of $981,
respectively.
|
|
|
|
(C)
|
For the nine months
ended July 1, 2017, the gain from business combination was
$5,416 ($3,426 net of tax ($0.14 per diluted share)).
|
|
|
|
(D)
|
For the quarters
ended July 1, 2017, April 1, 2017 and July 2, 2016,
the impact of amortization of intangibles expense was $15,452
($10,870 net of tax ($0.44 per diluted share)), $16,763 ($12,573
net of tax ($0.51 per diluted share)), and $2,032 ($1,400 net of
tax ($0.06 per diluted share)), respectively. For the nine months
ended July 1, 2017 and July 2, 2016, the impact of
amortization of intangible expense was $44,303 ($31,169 net of tax
($1.26 per diluted share)) and $6,201 ($4,270 net of tax ($0.18 per
diluted share)), respectively.
|
|
|
|
(E)
|
For the quarters
ended July 1, 2017 and April 1, 2017, the impact of
inventory step-up costs related to acquisitions was $4,445 ($3,172
net of tax ($0.13 per diluted share)) and $13,019 ($9,401 net of
tax ($0.38 per diluted share)), respectively. For the nine months
ended July 1, 2017, the impact of inventory and favorable
lease step-up costs related to acquisitions was $26,768 ($19,042
net of tax ($0.77 per diluted share)).
|
|
|
|
(F)
|
For the quarters
ended July 1, 2017 and April 1, 2017, the impact of
restructuring charges was $1,500 ($1,131 net of tax ($0.05 per
diluted share)) and $557 ($378 net of tax ($0.02 per diluted
share)), respectively. For the nine months ended July 1, 2017,
the impact of restructuring charges was $9,119 ($6,109 net of tax
($0.25 per diluted share)).
|
|
|
|
(G)
|
The quarters ended
July 1, 2017, April 1, 2017 and July 2, 2016
included $426 ($269 net of tax ($0.01 per diluted share)), $2,933
($2,664 net of tax ($0.11 per diluted share)) and $3,050 ($2,012
net of tax ($0.08 per diluted share)), respectively, of costs
related to the acquisition of Rofin. The nine months ended
July 1, 2017 and July 2, 2016 included $17,587 ($17,425
net of tax ($0.70 per diluted share)) and $6,634 ($4,276 net of tax
($0.18 per diluted share)), respectively, of costs related to the
acquisition of Rofin.
|
|
|
|
(H)
|
For the nine months
ended July 1, 2017, the gain on our hedge of the debt
commitment and issuance of the debt was $11,298 ($7,147 net of tax
($0.29 per diluted share)) and interest expense on the debt
commitment was $2,665 ($1,844 net of tax ($0.07 per diluted
share)).
|
|
|
|
(I)
|
The nine months ended
July 2, 2016 included $1,221 ($0.05 per diluted share)
non-recurring tax benefit from the renewal of the R&D tax
credit for fiscal 2015.
|
Summarized balance sheet information is as follows (unaudited,
in thousands):
|
July 1,
2017
|
|
October 1,
2016
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash, cash
equivalents, restricted cash and short-term investments
|
$
|
473,487
|
|
|
$
|
399,953
|
|
|
Accounts receivable,
net
|
277,853
|
|
|
165,715
|
|
|
Inventories
|
402,849
|
|
|
212,898
|
|
|
Prepaid expenses and
other assets
|
74,827
|
|
|
37,073
|
|
|
Assets
held-for-sale
|
32,556
|
|
|
—
|
|
|
Total current
assets
|
1,261,572
|
|
|
815,639
|
|
|
Property and
equipment, net
|
268,622
|
|
|
127,443
|
|
|
Other
assets
|
748,235
|
|
|
218,066
|
|
|
Total
assets
|
$
|
2,278,429
|
|
|
$
|
1,161,148
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term
borrowings
|
$
|
5,485
|
|
|
$
|
20,000
|
|
|
Accounts
payable
|
72,755
|
|
|
45,182
|
|
|
Other current
liabilities
|
301,069
|
|
|
136,312
|
|
|
Total current
liabilities
|
379,309
|
|
|
201,494
|
|
|
Other long-term
liabilities
|
831,078
|
|
|
48,826
|
|
|
Total stockholders'
equity
|
1,068,042
|
|
|
910,828
|
|
|
Total liabilities and
stockholders' equity
|
$
|
2,278,429
|
|
|
$
|
1,161,148
|
|
Reconciliation of GAAP to Non-GAAP net income (unaudited, in
thousands (other than per share data), net of tax):
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
July 1,
2017
|
|
April 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
|
GAAP net income from
continuing operations
|
$
|
62,871
|
|
|
$
|
42,188
|
|
|
$
|
18,650
|
|
|
$
|
135,757
|
|
|
$
|
56,717
|
|
|
Stock-based
compensation expense
|
5,041
|
|
|
4,868
|
|
|
4,101
|
|
|
18,075
|
|
|
11,371
|
|
|
Restructuring
charges
|
1,131
|
|
|
378
|
|
|
—
|
|
|
6,109
|
|
|
—
|
|
|
Amortization of
intangible assets
|
10,870
|
|
|
12,573
|
|
|
1,400
|
|
|
31,169
|
|
|
4,270
|
|
|
Gain on business
combination
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,426)
|
|
|
—
|
|
|
Non-recurring tax
benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,221)
|
|
|
Acquisition-related
costs
|
269
|
|
|
2,664
|
|
|
2,012
|
|
|
17,425
|
|
|
4,276
|
|
|
Interest expense on
debt commitment
|
—
|
|
|
—
|
|
|
—
|
|
|
1,844
|
|
|
—
|
|
|
Gain on hedge of debt
and debt commitment
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,147)
|
|
|
—
|
|
|
Purchase accounting
step-up
|
3,172
|
|
|
9,401
|
|
|
—
|
|
|
19,042
|
|
|
—
|
|
|
Non-GAAP net
income
|
$
|
83,354
|
|
|
$
|
72,072
|
|
|
$
|
26,163
|
|
|
$
|
218,848
|
|
|
$
|
75,413
|
|
|
Non-GAAP net income
per diluted share
|
$
|
3.36
|
|
|
$
|
2.91
|
|
|
$
|
1.07
|
|
|
$
|
8.85
|
|
|
$
|
3.10
|
|
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements, as
defined under the Federal securities laws. These forward-looking
statements include the statements in this press release that relate
to customer demand for our products, our outlook for the flat panel
display market and ability to satisfy anticipated demand, capacity
projections, the timing and subject matter for capital spending and
the timing and pace of any payment of our outstanding debt. These
forward-looking statements are not guarantees of future results and
are subject to risks, uncertainties and assumptions that could
cause our actual results to differ materially and adversely from
those expressed in any forward-looking statement. Factors that
could cause actual results to differ materially include risks and
uncertainties, including, but not limited to, risks associated with
any general market recovery, growth in demand for our products,
customer acceptance of our products, the worldwide demand for flat
panel displays, the demand for and use of our products in
commercial applications, our ability to general sufficient cash to
fund capital spending or debt repayment, our successful
implementation of our customer design wins, our and our customers'
exposure to risks associated with worldwide economic conditions,
our customers' ability to cancel long-term purchase orders, the
ability of our customers to forecast their own end markets, our
ability to accurately forecast future periods, customer acceptance
and adoption of our new product offerings, continued timely
availability of products and materials from our suppliers, our
ability to timely ship our products and our customers' ability to
accept such shipments, our ability to have our customers qualify
our product offerings, worldwide government economic policies, our
ability to integrate the business of Rofin successfully, manage our
expanded operations and achieve anticipated synergies, and other
risks identified in the Company's SEC filings. Readers are
encouraged to refer to the risk disclosures and critical accounting
policies and estimates described in the Company's reports on Forms
10-K, 10-Q and 8-K, as applicable and as filed from time-to-time by
the Company. Actual results, events and performance may differ
materially from those presented herein. 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.
Founded in 1966, Coherent, Inc. is one of the world's leading
providers of lasers, laser-based technologies and laser-based
system solutions for scientific, commercial and industrial
customers. Our common stock is listed on the Nasdaq Global Select
Market and is part of the Russell 2000 and Standard & Poor's
MidCap 400 Index. For more information about Coherent, visit the
company's website at www.coherent.com/ for product and
financial updates.
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SOURCE Coherent, Inc.