IPG Photonics Corporation (NASDAQ: IPGP) today reported
financial results for the third quarter ended September 30,
2012.
Three Months Ended Nine Months
Ended
September
30,
September
30,
(In millions, except per share data)
2012
2011
%
Change
2012
2011
%
Change
Revenue $ 156.4 $ 129.1 21% $ 417.5 $ 351.0 19% Gross
margin 55.0% 54.6% 55.0% 54.4% Operating income $ 60.0 $
49.2 22% $ 161.6 $ 129.5 25% Operating margin 38.4% 38.1%
38.7% 36.9% Net income attributable to IPG Photonics
Corporation $ 42.4 $ 32.9 29% $ 110.1 $ 86.7 27% Earnings
per diluted share $ 0.81 $ 0.66 23% $ 2.16 $ 1.77 22%
Management Comments
“IPG’s performance momentum continued into the third quarter by
delivering record results on the top and bottom lines,” said Dr.
Valentin Gapontsev, IPG Photonics’ Chief Executive Officer.
“Revenues grew by more than 21% over the prior year and net income
increased by 29%.”
“Materials processing sales increased by 21%, driven primarily
by high-power laser sales for automotive and general manufacturing
applications,” said Dr. Gapontsev. “High-power laser sales
increased 16%, while pulsed laser sales grew by 51% driven by
increased demand for consumer electronics applications.
Medium-power laser sales grew by 11%, primarily due to demand for
thin metal cutting and welding in micro-processing
applications.”
“Strength in the U.S. and Europe for cutting and welding
applications in automotive and general manufacturing, as well as
marking and engraving in consumer electronics, were the primary
drivers of our record revenue performance. In addition, advanced
applications revenue benefited from sales of several high-power and
brightness lasers,” said Dr. Gapontsev. “Our growth in Europe was
partially offset by lower demand in Russia. In Asia, we continued
to expand our business in Turkey, while Japan and China both showed
moderate growth.”
“During the third quarter, IPG generated $38 million in cash
from operations,” said Dr. Gapontsev. “A portion of that cash was
used to fund the acquisition of JP Sercel Associates, Inc., which
we expect to strengthen our product portfolio and accelerate IPG’s
penetration into the fine-processing markets. We maintained a
strong balance sheet, ending the quarter with $372.6 million in
cash and cash equivalents.”
Business Outlook and Financial Guidance
“We expect to report strong year-over-year growth in the fourth
quarter as we continue to capitalize on the fundamentals that are
driving our business,” said Dr. Gapontsev. “At the same time, we
will face challenges in the fourth quarter, including historical
seasonality in some markets and macro-economic pressures in a few
key geographies. As a result of these factors, our book-to-bill
ratio was less than one in Q3. Looking ahead, we remain confident
that the fundamentals of our business and competitive position are
strong and we expect to continue to displace incumbent technologies
and add OEM customers as our lasers are qualified for more
applications.”
IPG Photonics expects revenue in the range of $140 million to
$150 million for the fourth quarter of 2012. The Company
anticipates earnings per diluted share in the range of $0.65 to
$0.75 based on 52,102,000 diluted common shares, which includes
51,090,000 basic common shares outstanding and 1,012,000
potentially dilutive options at September 30, 2012.
As discussed in more detail below, actual results may differ
from this guidance due to various factors including, but not
limited to, product demand, competition and general economic
conditions. This guidance is subject to the risks outlined in the
Company’s reports with the SEC, and assumes that exchange rates
remain at present levels.
Conference Call Reminder
The Company will hold a conference call to review its financial
results and business highlights today, October 31, 2012 at 10:00
a.m. ET. The conference call will be webcast live and can be
accessed on the “Investors” section of the Company’s website at
www.ipgphotonics.com. The conference call also can be accessed by
dialing (877) 270-2148 or (412) 902-6510. Interested parties that
are unable to listen to the live call may access an archived
version of the webcast, which will be available for approximately
one year on IPG’s website.
About IPG Photonics Corporation
IPG Photonics Corporation is the world leader in high-power
fiber lasers and amplifiers. Founded in 1990, IPG pioneered the
development and commercialization of optical fiber-based lasers for
use in diverse applications, primarily materials processing. Fiber
lasers have revolutionized the industry by delivering superior
performance, reliability and usability at a lower total cost of
ownership compared with conventional lasers, allowing end users to
increase productivity and decrease operating costs. IPG has its
headquarters in Oxford, Massachusetts, and has additional plants
and offices throughout the world. For more information, please
visit www.ipgphotonics.com.
Safe Harbor Statement
Information and statements provided by the Company and its
employees, including statements in this press release, that relate
to future plans, events or performance are forward-looking
statements. These statements involve risks and uncertainties. Any
statements in this press release that are not statements of
historical fact are forward-looking statements, including, but not
limited to, strengthening the Company's product portfolio,
accelerating its penetration into the fine-processing market,
reporting strong year-over-year growth in the fourth quarter,
continuing to capitalize on the fundamentals that are driving the
Company's business, that the fundamentals of its business and
competitive position are strong, continued displacement of
incumbent technologies and adding OEM customers as IPG's lasers are
qualified for more applications, and revenue and earnings per share
expectations for the fourth quarter of 2012. Factors that could
cause actual results to differ materially include risks and
uncertainties, including risks associated with the strength or
weakness of the business conditions in industries and geographic
markets that the Company serves, particularly the effect of
economic downturns; reduction in customer capital expenditures;
potential order cancellations and push-outs and financial and
credit market issues; the Company’s ability to penetrate new
applications for fiber lasers and increase market share; the rate
of acceptance and penetration of IPG’s products; effective
management of growth; level of fixed costs from its vertical
integration; intellectual property infringement claims and
litigation; interruption in supply of key components, including
from transportation disruptions from natural and man-made events;
manufacturing risks; inventory write-downs; foreign currency
fluctuations; competitive factors, including declining average
selling prices; building and expanding field service and support
operations; uncertainties pertaining to customer orders; demand for
products and services; development of markets for the Company's
products and services; and other risks identified in the Company's
SEC filings. Readers are encouraged to refer to the risk factors
described in the Company's Annual Report on Form 10-K (filed with
the SEC on February 27, 2012) and its periodic reports filed with
the SEC, as applicable. Actual results, events and performance may
differ materially. Readers are cautioned not to rely on the
forward-looking statements, which speak only as of the date hereof.
The Company undertakes no obligation to update the forward-looking
statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events.
IPG PHOTONICS CORPORATION CONSOLIDATED STATEMENTS
OF INCOME
Three Months Ended September 30,
Nine Months Ended September 30, 2012 2011
2012 2011 (in thousands, except per share
data) NET SALES $ 156,379 $ 129,064 $ 417,498 $ 350,958 COST OF
SALES 70,420 58,605 187,945
160,127 GROSS PROFIT 85,959
70,459 229,553 190,831
OPERATING EXPENSES: Sales and marketing 5,785 5,656 16,771 16,451
Research and development 7,762 6,501 22,131 18,842 General and
administrative 10,609 10,997 29,294 27,499 Loss (gain) on foreign
exchange 1,796 (1,927 ) (272 )
(1,413 ) Total operating expenses 25,952
21,227 67,924 61,379 OPERATING
INCOME 60,007 49,232 161,629
129,452 OTHER INCOME (EXPENSE), Net: Interest
income (expense), net 55 (209 ) 541 (585 ) Other income (expense),
net 205 145 (981 ) (465 )
Total other income (expense) 260 (64 )
(440 ) (1,050 ) INCOME BEFORE PROVISION FOR INCOME TAXES
60,267 49,168 161,189 128,402 PROVISION FOR INCOME TAXES
(17,832 ) (14,899 ) (48,357 ) (39,248 ) NET
INCOME 42,435 34,269 112,832 89,154
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
- 1,400 2,740
2,481
NET INCOME ATTRIBUTABLE TO IPG PHOTONICS
CORPORATION
$ 42,435 $ 32,869 $ 110,092 $ 86,673
NET INCOME ATTRIBUTABLE TO IPG PHOTONICS
CORPORATION PER SHARE:
Basic $ 0.83 $ 0.68 $ 2.20 $ 1.82 Diluted $ 0.81 $ 0.66 $ 2.16 $
1.77 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 51,090 47,483
50,204 47,298 Diluted 52,102 48,747 51,281 48,684
IPG PHOTONICS CORPORATION SUPPLEMENTAL SCHEDULE OF
STOCK-BASED COMPENSATION Three
Months Ended Nine Months Ended
September
30,
September
30,
(In thousands)
2012
2011
2012
2011
Cost of sales $ 563 $ 419 $ 1,590 $ 1,303 Sales and
marketing 289 311 827 1,206 Research and development 334 252 976
789 General and administrative 973 897
2,965 2,882 Total stock-based
compensation 2,159 1,879 6,358 6,180 Tax benefit recognized
(655 ) (575 ) (1,938 ) (1,982 ) Net
stock-based compensation $ 1,504 $ 1,304 $ 4,420 $ 4,198
IPG PHOTONICS CORPORATION CONSOLIDATED BALANCE
SHEETS September 30,
December 31, 2012
2011 (In thousands, except share and per share
data) ASSETS CURRENT ASSETS: Cash and cash equivalents $
372,569 $ 180,234 Short-term investments - 25,451 Accounts
receivable, net 110,649 75,755 Inventories, net 135,121 116,978
Prepaid income taxes and income taxes receivable 13,968 13,285
Prepaid expenses and other current assets 18,296 11,855 Deferred
income taxes, net 10,503 10,899 Total
current assets 661,106 434,457 DEFERRED INCOME TAXES, NET 4,419
4,830 GOODWILL 3,113 - INTANGIBLE ASSETS, NET 7,875 6,157 PROPERTY,
PLANT AND EQUIPMENT, NET 195,153 155,202 OTHER ASSETS 6,719
7,486 TOTAL $ 878,385 $ 608,132
LIABILITIES AND EQUITY CURRENT LIABILITIES: Revolving
line-of-credit facilities $ 4,900 $ 7,057 Current portion of
long-term debt 1,572 1,613 Accounts payable 14,291 11,122 Accrued
expenses and other liabilities 55,733 47,285 Deferred income taxes,
net 7,181 5,405 Income taxes payable 37,604
21,230 Total current liabilities 121,281 93,712 OTHER
LONG-TERM LIABILITIES 13,191 8,961 LONG-TERM DEBT, NET OF CURRENT
PORTION 14,341 15,726 Total liabilities
148,813 118,399 REDEEMABLE NONCONTROLLING INTERESTS - 46,123 IPG
PHOTONICS CORPORATION STOCKHOLDERS’ EQUITY: Common stock, $0.0001
par value, 175,000,000 shares authorized; 51,270,197 shares issued
and outstanding at September 30, 2012; 47,616,115 shares issued and
outstanding at December 31, 2011 5 5 Additional paid-in capital
506,854 332,585 Retained earnings 233,418 122,833 Accumulated other
comprehensive loss (10,705 ) (12,100 ) Total IPG
Photonics Corporation stockholders’ equity 729,572 443,323
NONCONTROLLING INTERESTS - 287 Total
equity 729,572 443,610 TOTAL $ 878,385
$ 608,132
IPG PHOTONICS
CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30,
2012 2011 (In
thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net
income $ 112,832 $ 89,154 Adjustments to reconcile net income to
net cash provided by operating activities: Depreciation and
amortization 19,168 18,182 Provisions for inventory, warranty &
bad debt 14,762 11,859 Other 10,585 7,110 Changes in assets and
liabilities that provided (used) cash: Accounts receivable/payable
(34,344 ) (20,746 ) Inventories (17,050 ) (52,261 ) Other
10,552 2,697 Net cash provided by operating
activities 116,505 55,995
CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property,
plant and equipment (51,715 ) (34,750 ) Proceeds from short-term
investments 25,452 - Acquisition of businesses, net of cash
acquired (11,596 ) (450 ) Other (313 ) 189 Net
cash used in investing activities (38,172 ) (35,011 )
CASH FLOWS FROM FINANCING ACTIVITIES: Line-of-credit
facilities (1,958 ) 585 Principal payments on long-term borrowings
(1,848 ) (1,046 ) Purchase of noncontrolling interests (700 ) -
(Purchase) sale of redeemable noncontrolling interests (55,400 )
19,973 Exercise of employee stock options and issuances under
employee stock purchase plan 8,145 12,001 Proceeds from follow-on
public offering, net of offering expenses 167,963
- Net cash provided by financing activities
116,202 31,513 EFFECT OF CHANGES IN
EXCHANGE RATES ON CASH AND CASH EQUIVALENTS (2,200 )
(3,771 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 192,335 48,726
CASH AND CASH EQUIVALENTS — Beginning of period 180,234
147,860 CASH AND CASH EQUIVALENTS — End of
period $ 372,569 $ 196,586 SUPPLEMENTAL DISCLOSURES
OF CASH FLOW INFORMATION: Cash paid for interest $ 553 $ 809
Cash paid for income taxes $ 20,967 $ 19,465
IPG Photonics (NASDAQ:IPGP)
Historical Stock Chart
From Sep 2024 to Oct 2024
IPG Photonics (NASDAQ:IPGP)
Historical Stock Chart
From Oct 2023 to Oct 2024