SANTA CLARA, Calif.,
July 31, 2018 /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 June 30,
2018.
FINANCIAL HIGHLIGHTS
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
June
30,
|
|
March 31,
|
|
July 1,
|
|
June
30,
|
|
July 1,
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
GAAP
Results
|
|
|
|
|
|
|
|
|
|
|
(in millions except
per share data)
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
482.3
|
|
|
$
|
481.1
|
|
|
$
|
464.1
|
|
|
$
|
1,441.0
|
|
|
$
|
1,233.0
|
|
|
Net income
|
$
|
67.0
|
|
|
$
|
65.3
|
|
|
$
|
61.1
|
|
|
$
|
174.2
|
|
|
$
|
133.4
|
|
|
Diluted
EPS
|
$
|
2.69
|
|
|
$
|
2.61
|
|
|
$
|
2.46
|
|
|
$
|
6.98
|
|
|
$
|
5.39
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Results
|
|
|
|
|
|
|
|
|
|
|
(in millions except
per share data)
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
87.3
|
|
|
$
|
84.3
|
|
|
$
|
83.4
|
|
|
$
|
260.1
|
|
|
$
|
218.8
|
|
|
Diluted
EPS
|
$
|
3.51
|
|
|
$
|
3.37
|
|
|
$
|
3.36
|
|
|
$
|
10.42
|
|
|
$
|
8.85
|
|
THIRD FISCAL QUARTER DETAILS
For the third fiscal quarter ended June 30, 2018, Coherent
announced net sales of $482.3 million
and net income, on a U.S. generally accepted accounting principles
(GAAP) basis, of $67.0 million, or
$2.69 per diluted share. These
results compare to net sales of $464.1
million and net income of $61.1
million, or $2.46 per diluted
share, for the third quarter of fiscal 2017.
Non-GAAP net income for the third quarter of fiscal 2018 was
$87.3 million, or $3.51 per diluted share. Non-GAAP net
income for the third quarter of fiscal 2017 was $83.4 million, or $3.36 per diluted share. Reconciliations of GAAP
to non-GAAP financial measures for the three months ended
June 30, 2018, March 31, 2018 and July 1, 2017 and
nine months ended June 30, 2018 and July 1, 2017 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 fiscal quarter of 2018 were
$481.1 million and net income, on a
GAAP basis, was $65.3 million, or
$2.61 per diluted share. Non-GAAP net
income for the second quarter of fiscal 2018 was $84.3 million, or $3.37 per diluted share.
Results for the nine months ended June 30, 2018 include
additional income tax expense of $41.7
million, or $1.67 per diluted
share, due to the provisions under the Tax Cuts and Jobs Act (the
"Tax Act") as well as a benefit of $12.8
million, or $0.51 per diluted
share, from the adoption of new rules for accounting for excess tax
benefits and deficiencies for employee stock-based compensation.
The Securities and Exchange Commission has issued rules that allow
for a measurement period of up to one year after the enactment date
of the Tax Act to finalize the recording of the related tax
impacts. Coherent currently anticipates finalizing and recording
any resulting adjustments by the end of the fourth fiscal quarter
ending September 29, 2018.
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 July 1, 2017 in Coherent's nine months results
ended July 1, 2017. Subsequent to the
first quarter of fiscal 2017, Rofin's operating results are
consolidated in Coherent's results for the full quarter and
year-to-date.
"There continues to be intense interest and speculation about
the flat panel display market. From our vantage point, demand
for OLED displays remains robust, but growth in the OLED share of
the display market is being hindered by pricing and
availability. This can only be corrected when one or more
vendors becomes able to compete with the primary OLED display
provider in the marketplace. We believe that this short-term
dynamic will lead to a down year for OLED equipment spending by
display manufacturers in 2019 before a reacceleration of investment
in 2020. Growth in our other businesses will largely
compensate for the decrease in our flat panel display business such
that fiscal 2019 revenue should be within 5% of fiscal 2018," said
John Ambroseo, Coherent's President
and Chief Executive Officer. "As a result of our business
diversity, we remain confident in our longer-term business
outlook. We utilized the previously approved stock repurchase
authorization to buy back approximately $100
million of common stock during the June quarter," 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
|
|
June
30,
|
|
March 31,
|
|
July 1,
|
|
June
30,
|
|
July 1,
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
482,342
|
|
|
$
|
481,118
|
|
|
$
|
464,107
|
|
|
$
|
1,441,025
|
|
|
$
|
1,233,013
|
|
|
Cost of
sales(A)(B)(D)(E)(F)
|
274,006
|
|
|
265,688
|
|
|
256,921
|
|
|
800,236
|
|
|
704,798
|
|
|
Gross
profit
|
208,336
|
|
|
215,430
|
|
|
207,186
|
|
|
640,789
|
|
|
528,215
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Research &
development(A)(B)(F)
|
34,303
|
|
|
34,783
|
|
|
30,483
|
|
|
100,478
|
|
|
88,103
|
|
|
Selling, general
& administrative(A)(B)(E)(F)(G)
|
70,291
|
|
|
77,146
|
|
|
72,383
|
|
|
220,874
|
|
|
218,602
|
|
|
Gain from business
combination(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,416)
|
|
|
Other impairment
charges(recoveries) (I)
|
611
|
|
|
(110)
|
|
|
—
|
|
|
766
|
|
|
—
|
|
|
Amortization
of intangible assets(D)
|
2,607
|
|
|
2,950
|
|
|
3,743
|
|
|
8,163
|
|
|
13,060
|
|
|
Total operating
expenses
|
107,812
|
|
|
114,769
|
|
|
106,609
|
|
|
330,281
|
|
|
314,349
|
|
|
Income from
operations
|
100,524
|
|
|
100,661
|
|
|
100,577
|
|
|
310,508
|
|
|
213,866
|
|
|
Other income
(expense), net(B) (H)
|
(7,625)
|
|
|
(9,510)
|
|
|
(7,942)
|
|
|
(25,635)
|
|
|
(13,025)
|
|
|
Income from
continuing operations, before income taxes
|
92,899
|
|
|
91,151
|
|
|
92,635
|
|
|
284,873
|
|
|
200,841
|
|
|
Provision for income
taxes (J)
|
25,929
|
|
|
25,849
|
|
|
29,764
|
|
|
110,698
|
|
|
65,084
|
|
|
Net income from
continuing operations
|
66,970
|
|
|
65,302
|
|
|
62,871
|
|
|
174,175
|
|
|
135,757
|
|
|
Income (loss) from
discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
(1,754)
|
|
|
(2)
|
|
|
(2,387)
|
|
|
Net income
|
$
|
66,970
|
|
|
$
|
65,302
|
|
|
$
|
61,117
|
|
|
$
|
174,173
|
|
|
$
|
133,370
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic from continuing
operations
|
2.72
|
|
|
2.64
|
|
|
2.56
|
|
|
7.06
|
|
|
5.55
|
|
|
Basic from
discontinued operations
|
—
|
|
|
—
|
|
|
(0.07)
|
|
|
—
|
|
|
(0.10)
|
|
|
Basic earnings per
share
|
$
|
2.72
|
|
|
$
|
2.64
|
|
|
$
|
2.49
|
|
|
$
|
7.06
|
|
|
$
|
5.45
|
|
|
Diluted from
continuing operations
|
2.69
|
|
|
2.61
|
|
|
2.53
|
|
|
6.98
|
|
|
5.49
|
|
|
Diluted from
discontinued operations
|
—
|
|
|
—
|
|
|
(0.07)
|
|
|
—
|
|
|
(0.10)
|
|
|
Diluted earnings per
share
|
$
|
2.69
|
|
|
$
|
2.61
|
|
|
$
|
2.46
|
|
|
$
|
6.98
|
|
|
$
|
5.39
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computations:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
24,658
|
|
|
24,761
|
|
|
24,537
|
|
|
24,684
|
|
|
24,460
|
|
|
Diluted
|
24,877
|
|
|
25,010
|
|
|
24,823
|
|
|
24,971
|
|
|
24,741
|
|
|
|
|
(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
|
|
June
30,
|
|
March 31,
|
|
July 1,
|
|
June
30,
|
|
July 1,
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Cost of
sales
|
$
|
1,168
|
|
|
$
|
1,018
|
|
|
$
|
880
|
|
|
$
|
3,174
|
|
|
$
|
2,618
|
|
|
Research &
development
|
838
|
|
|
872
|
|
|
639
|
|
|
2,378
|
|
|
2,289
|
|
|
Selling, general
& administrative
|
6,577
|
|
|
6,520
|
|
|
5,373
|
|
|
18,517
|
|
|
18,323
|
|
|
Impact on income from
operations
|
$
|
8,583
|
|
|
$
|
8,410
|
|
|
$
|
6,892
|
|
|
$
|
24,069
|
|
|
$
|
23,230
|
|
|
|
|
For the fiscal
quarters ended June 30, 2018, March 31, 2018 and
July 1, 2017, the impact on net income, net of tax was $7,549
($0.30 per diluted share), $7,235 ($0.29 per diluted share) and
$5,041 ($0.20 per diluted share), respectively. For the nine months
ended June 30, 2018 and July 1, 2017, the impact on net
income, net of tax was $20,251 ($0.81 per diluted share) and
$18,075 ($0.73 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
|
|
June
30,
|
|
March 31,
|
|
July 1,
|
|
June
30,
|
|
July 1,
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Cost of
sales
|
$
|
11
|
|
|
$
|
28
|
|
|
$
|
53
|
|
|
$
|
117
|
|
|
$
|
123
|
|
|
Research &
development
|
46
|
|
|
128
|
|
|
163
|
|
|
533
|
|
|
496
|
|
|
Selling, general
& administrative
|
414
|
|
|
602
|
|
|
1,014
|
|
|
2,643
|
|
|
2,382
|
|
|
Impact on income from
operations
|
$
|
471
|
|
|
$
|
758
|
|
|
$
|
1,230
|
|
|
$
|
3,293
|
|
|
$
|
3,001
|
|
|
|
|
For the fiscal
quarters ended June 30, 2018, March 31, 2018 and
July 1, 2017, the impact on other income (expense), net from
gains or losses on deferred compensation plan assets was income of
$416, $768 and $1,204, respectively. For the nine months ended
June 30, 2018 and July 1, 2017, the impact on other
income (expense) net from gains or losses on deferred compensation
plan assets was income of $3,090 and $3,027,
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 fiscal
quarters ended June 30, 2018, March 31, 2018 and
July 1, 2017, the impact of amortization of intangibles
expense was $15,209 ($10,859 net of tax ($0.44 per diluted share)),
$15,329 ($10,931 net of tax ($0.44 per diluted share)) and $15,452
($10,870 net of tax ($0.44 per diluted share)), respectively. For
the nine months ended June 30, 2018 and July 1, 2017, the
impact of amortization of intangible expense was $45,638 ($32,563
net of tax ($0.81 per diluted share)) and $44,303 ($31,169 net of
tax ($1.26 per diluted share)), respectively.
|
|
|
|
(E)
|
For the fiscal
quarter ended June 30, 2018, March 31, 2018 and
July 1, 2017, the impact of inventory and favorable lease
step-up costs related to acquisitions was $392 ($281 net of tax
($0.01 per diluted share)), $411 ($293 net of tax ($0.01 per
diluted share)) and $4,445 ($3,172 net of tax ($0.13 per diluted
share)), respectively. For the nine months ended June 30, 2018
and July 1, 2017, the impact of inventory and favorable lease
step-up costs related to acquisitions was $803 ($574 net of tax
($0.02 per diluted share)) and $26,768 ($19,042 net of tax ($0.77
per diluted share)), respectively.
|
|
|
|
(F)
|
For the fiscal
quarters ended June 30, 2018, March 31, 2018 and
July 1, 2017, the impact of restructuring charges was $1,192
($870 net of tax ($0.04 per diluted share)), $726 ($555 net of tax
($0.02 per diluted share)) and $1,500 ($1,131 net of tax ($0.05 per
diluted share)), respectively. For the nine months ended
June 30, 2018 and July 1, 2017, the impact of
restructuring charges was $3,078 ($2,275 net of tax ($0.09 per
diluted share)) and $9,119 ($6,109 net of tax ($0.25 per diluted
share)), respectively.
|
|
|
|
(G)
|
For the fiscal
quarters ended June 30, 2018, March 31, 2018 and
July 1, 2017, the impact of costs related to acquisitions
included $129 ($129 net of tax ($0.01 per diluted share), $400
($400 net of tax ($0.01 per diluted share)) and $426 ($269 net of
tax ($0.01 per diluted share)), respectively. The nine months
ended June 30, 2018 and July 1, 2017 included $529 ($529
net of tax ($0.02 per diluted share)) and $17,587 ($17,425 net of
tax ($0.70 per diluted share)) of costs related to acquisitions,
respectively.
|
|
|
|
(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)
|
For the fiscal
quarters ended June 30, 2018 and March 31, 2018, other
impairment charges (recoveries) was an impairment charge of $611
($611 net of tax ($0.02 per diluted share)) and a recovery of $110
($110 net of tax ($0.00 per diluted share)), respectively. For the
nine months ended June 30, 2018, other impairment charges
(recoveries) was an impairment charge of $766 ($766 net of tax
($0.03 per diluted share)).
|
|
|
|
(J)
|
The nine months ended
June 30, 2018 included $41,745 ($1.67 per diluted share)
non-recurring tax expense due to the U.S. Tax Cuts and Jobs Act
transition tax and deferred tax remeasurement and $12,754 ($0.51
per diluted share) tax benefit from the adoption of new rules for
accounting for excess tax benefits and tax deficiencies for
employee stock-based compensation. The quarters ended June 30,
2018 and March 31, 2018 included a tax benefit of $4 ($0.00
per diluted share) and $299 ($0.01 per diluted share),
respectively, from the adoption of new rules for accounting for
excess tax benefits and tax deficiencies for employee stock-based
compensation.
|
Summarized balance sheet information is as follows (unaudited,
in thousands):
|
June
30,
|
|
September
30,
|
|
2018
|
|
2017
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash, cash
equivalents, restricted cash and short-term investments
|
$
|
233,540
|
|
|
$
|
476,673
|
|
|
Accounts receivable,
net
|
337,560
|
|
|
305,668
|
|
|
Inventories
|
494,967
|
|
|
414,807
|
|
|
Prepaid expenses and
other assets
|
88,490
|
|
|
70,268
|
|
|
Assets
held-for-sale
|
—
|
|
|
44,248
|
|
|
Total current
assets
|
1,154,557
|
|
|
1,311,664
|
|
|
Property and
equipment, net
|
303,214
|
|
|
278,850
|
|
|
Other
assets
|
729,797
|
|
|
747,286
|
|
|
Total assets
|
$
|
2,187,568
|
|
|
$
|
2,337,800
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term
borrowings
|
$
|
7,076
|
|
|
$
|
5,078
|
|
|
Accounts
payable
|
82,602
|
|
|
75,860
|
|
|
Other current
liabilities
|
262,478
|
|
|
338,207
|
|
|
Total current
liabilities
|
352,156
|
|
|
419,145
|
|
|
Other long-term
liabilities
|
604,261
|
|
|
755,391
|
|
|
Total stockholders'
equity
|
1,231,151
|
|
|
1,163,264
|
|
|
Total liabilities and
stockholders' equity
|
$
|
2,187,568
|
|
|
$
|
2,337,800
|
|
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
|
|
June
30,
|
|
March 31,
|
|
July 1,
|
|
June
30,
|
|
July 1,
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
GAAP net income from
continuing operations
|
$
|
66,970
|
|
|
$
|
65,302
|
|
|
$
|
62,871
|
|
|
$
|
174,175
|
|
|
$
|
135,757
|
|
|
Stock-based
compensation expense
|
7,549
|
|
|
7,235
|
|
|
5,041
|
|
|
20,251
|
|
|
18,075
|
|
|
Amortization of
intangible assets
|
10,859
|
|
|
10,931
|
|
|
10,870
|
|
|
32,563
|
|
|
31,169
|
|
|
Restructuring
charges
|
870
|
|
|
555
|
|
|
1,131
|
|
|
2,275
|
|
|
6,109
|
|
|
Gain on business
combination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,426)
|
|
|
Non-recurring tax
expense (benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
41,745
|
|
|
—
|
|
|
Tax benefit from
stock-based compensation expense
|
(4)
|
|
|
(299)
|
|
|
—
|
|
|
(12,754)
|
|
|
—
|
|
|
Interest expense on
debt commitment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,844
|
|
|
Gain on hedge of debt
and debt commitment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,147)
|
|
|
Other impairment
charges (recoveries)
|
611
|
|
|
(110)
|
|
|
—
|
|
|
766
|
|
|
—
|
|
|
Acquisition-related
costs
|
129
|
|
|
400
|
|
|
269
|
|
|
529
|
|
|
17,425
|
|
|
Purchase accounting
step-up
|
281
|
|
|
293
|
|
|
3,172
|
|
|
574
|
|
|
19,042
|
|
|
Non-GAAP net
income
|
$
|
87,265
|
|
|
$
|
84,307
|
|
|
$
|
83,354
|
|
|
$
|
260,124
|
|
|
$
|
218,848
|
|
|
Non-GAAP net income
per diluted share
|
$
|
3.51
|
|
|
$
|
3.37
|
|
|
$
|
3.36
|
|
|
$
|
10.42
|
|
|
$
|
8.85
|
|
RISKS AND UNCERTAINTIES
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 the Company's outlook for its flat panel display business and
demand for OLED displays, actual and projected spending by display
manufacturers and the expectation that growth in the Company's
other businesses will result in fiscal 2019 revenue that is within
5% of fiscal 2018 revenue. 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. The Company and its business, including
the aforementioned forward-looking statements, are subject to risks
and uncertainties, including, but not limited to, risks associated
with growth in demand for our products, customer acceptance and
adoption of our products, the worldwide demand for flat panel
displays and adoption of OLED for mobile displays, the pricing and
availability of OLED displays, the demand for and use of our
products in commercial applications, our ability to generate
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,
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
and other acquisitions 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 described in the
Company's reports on Forms 10-K, 10-Q and 8-K, including the risks
identified in today's financial press release, as applicable and as
filed from time-to-time by the Company.
Founded in 1966, Coherent, Inc. is 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 customers. Our common stock is listed on the Nasdaq
Global Select Market and is part of the Russell 1000 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.
5100 Patrick Henry Dr., Santa
Clara, California 95054 . Telephone
(408) 764-4000
View original content with
multimedia:http://www.prnewswire.com/news-releases/coherent-inc-reports-third-fiscal-quarter-results-300689580.html
SOURCE Coherent, Inc.