SANTA CLARA, Calif.,
April 30, 2019 /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 second fiscal quarter ended
March 30, 2019.
FINANCIAL
HIGHLIGHTS
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Mar. 30,
2019
|
|
Dec. 29,
2018
|
|
Mar. 31,
2018
|
|
Mar. 30,
2019
|
|
Mar. 31,
2018
|
GAAP
Results
|
|
|
|
|
|
|
|
|
|
(in millions, except
per share data)
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
372.9
|
|
|
$
|
383.1
|
|
|
$
|
481.1
|
|
|
$
|
756.0
|
|
|
$
|
958.7
|
|
Net income
|
$
|
20.8
|
|
|
$
|
35.6
|
|
|
$
|
65.3
|
|
|
$
|
56.3
|
|
|
$
|
107.2
|
|
Diluted
EPS
|
$
|
0.85
|
|
|
$
|
1.45
|
|
|
$
|
2.61
|
|
|
$
|
2.31
|
|
|
$
|
4.29
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Results
|
|
|
|
|
|
|
|
|
|
(in millions, except
per share data)
|
|
|
|
|
|
|
|
|
Net income
|
$
|
39.2
|
|
|
$
|
51.1
|
|
|
$
|
84.3
|
|
|
$
|
90.3
|
|
|
$
|
172.9
|
|
Diluted
EPS
|
$
|
1.61
|
|
|
$
|
2.09
|
|
|
$
|
3.37
|
|
|
$
|
3.70
|
|
|
$
|
6.91
|
|
SECOND FISCAL QUARTER DETAILS
For the second quarter of fiscal 2019, Coherent announced net
sales of $372.9 million and net
income, on a U.S. generally accepted accounting principles (GAAP)
basis, of $20.8 million, or
$0.85 per diluted share. These
results compare to net sales of $481.1
million and net income of $65.3
million, or $2.61 per diluted
share, for the second quarter of fiscal 2018 and net sales of
$383.1 million and net income of
$35.6 million, or $1.45 per diluted share, for the first quarter of
fiscal 2019.
Non-GAAP net income for the second quarter of fiscal 2019 was
$39.2 million, or $1.61 per diluted share. Non-GAAP net income for
the second quarter of fiscal 2018 was $84.3
million, or $3.37 per diluted
share. Non-GAAP net income for the first quarter of fiscal 2019 was
$51.1 million, or $2.09 per diluted share. Reconciliations of
GAAP to non-GAAP financial measures for the three months ended
March 30, 2019, December 29, 2018 and March 31, 2018
and six months ended March 30, 2019 and March 31, 2018
appear in the financial statements portion of this release under
the heading "Reconciliation of GAAP to Non-GAAP net income."
"Overall demand mirrored the behavior of global end markets. In
the display space, revenue was consistent with our previous
commentary that 2019 would be a down year for capital investment.
Very recent conversations with panel manufacturers indicate a
number of new fabs are scheduled to come online starting in 2020.
Orders in materials processing improved sequentially and customer
sentiment at the recent Shanghai
show was upbeat. While encouraging, it seems too early to
declare an imminent bounce back particularly given the unresolved
trade issues between the U.S. and China as well as a weakening PMI in the
Eurozone. Our OEM component business is robust and headed for a
record-setting year. Growth is especially strong in the aerospace
and defense market where our U.S. manufacturing base and product
portfolio are highly valued," said John
Ambroseo, Coherent's President and Chief Executive
Officer.
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
|
|
Six Months
Ended
|
|
Mar. 30,
2019
|
|
Dec. 29,
2018
|
|
Mar. 31,
2018
|
|
Mar. 30,
2019
|
|
Mar. 31,
2018
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
372,860
|
|
|
$
|
383,146
|
|
|
$
|
481,118
|
|
|
$
|
756,006
|
|
|
$
|
958,683
|
|
Cost of
sales(A)(B)(C)(D)(E)
|
242,143
|
|
|
233,796
|
|
|
265,688
|
|
|
475,939
|
|
|
526,230
|
|
Gross
profit
|
130,717
|
|
|
149,350
|
|
|
215,430
|
|
|
280,067
|
|
|
432,453
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research &
development(A)(B)(E)
|
30,461
|
|
|
28,942
|
|
|
34,783
|
|
|
59,403
|
|
|
66,175
|
|
Selling, general
& administrative(A)(B)(E)(F)
|
69,463
|
|
|
64,557
|
|
|
77,146
|
|
|
134,020
|
|
|
150,583
|
|
Other impairment
charges (recoveries)(G)
|
—
|
|
|
—
|
|
|
(110)
|
|
|
—
|
|
|
155
|
|
Amortization
of intangible assets(C)
|
1,926
|
|
|
3,040
|
|
|
2,950
|
|
|
4,966
|
|
|
5,556
|
|
Total operating
expenses
|
101,850
|
|
|
96,539
|
|
|
114,769
|
|
|
198,389
|
|
|
222,469
|
|
Income from
operations
|
28,867
|
|
|
52,811
|
|
|
100,661
|
|
|
81,678
|
|
|
209,984
|
|
Other income
(expense), net(B)
|
(4,252)
|
|
|
(9,151)
|
|
|
(9,510)
|
|
|
(13,403)
|
|
|
(18,010)
|
|
Income from
continuing operations, before income taxes
|
24,615
|
|
|
43,660
|
|
|
91,151
|
|
|
68,275
|
|
|
191,974
|
|
Provision for income
taxes (H)
|
3,865
|
|
|
8,110
|
|
|
25,849
|
|
|
11,975
|
|
|
84,769
|
|
Net income from
continuing operations
|
20,750
|
|
|
35,550
|
|
|
65,302
|
|
|
56,300
|
|
|
107,205
|
|
Income (loss) from
discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
Net income
|
$
|
20,750
|
|
|
$
|
35,550
|
|
|
$
|
65,302
|
|
|
$
|
56,300
|
|
|
$
|
107,203
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
0.86
|
|
|
$
|
1.46
|
|
|
$
|
2.64
|
|
|
$
|
2.32
|
|
|
$
|
4.34
|
|
Diluted earnings per
share
|
$
|
0.85
|
|
|
$
|
1.45
|
|
|
$
|
2.61
|
|
|
$
|
2.31
|
|
|
$
|
4.29
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computations:
|
|
|
|
|
|
|
|
|
|
Basic
|
24,232
|
|
|
24,268
|
|
|
24,761
|
|
|
24,250
|
|
|
24,698
|
|
Diluted
|
24,332
|
|
|
24,472
|
|
|
25,010
|
|
|
24,402
|
|
|
25,018
|
|
|
|
(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
|
|
Six Months
Ended
|
|
Mar. 30,
2019
|
|
Dec. 29,
2018
|
|
Mar. 31,
2018
|
|
Mar. 30,
2019
|
|
Mar. 31,
2018
|
Cost of
sales
|
$
|
1,172
|
|
|
$
|
1,237
|
|
|
$
|
1,018
|
|
|
$
|
2,409
|
|
|
$
|
2,006
|
|
Research &
development
|
783
|
|
|
650
|
|
|
872
|
|
|
1,433
|
|
|
1,540
|
|
Selling, general
& administrative
|
7,049
|
|
|
5,989
|
|
|
6,520
|
|
|
13,038
|
|
|
11,940
|
|
Impact on income from
operations
|
$
|
9,004
|
|
|
$
|
7,876
|
|
|
$
|
8,410
|
|
|
$
|
16,880
|
|
|
$
|
15,486
|
|
|
|
|
For the fiscal
quarters ended March 30, 2019, December 29, 2018 and
March 31, 2018, the impact on net income, net of tax was
$7,543 ($0.31 per diluted share), $6,643 ($0.27 per diluted share)
and $7,235 ($0.29 per diluted share), respectively. For the six
months ended March 30, 2019 and March 31, 2018, the
impact on net income, net of tax was $14,186 ($0.58 per diluted
share) and $12,702 ($0.51 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
|
|
Six Months
Ended
|
|
Mar. 30,
2019
|
|
Dec. 29,
2018
|
|
Mar. 31,
2018
|
|
Mar. 30,
2019
|
|
Mar. 31,
2018
|
Cost of
sales
|
$
|
62
|
|
|
$
|
(95)
|
|
|
$
|
28
|
|
|
$
|
(33)
|
|
|
$
|
106
|
|
Research &
development
|
118
|
|
|
(286)
|
|
|
128
|
|
|
(168)
|
|
|
487
|
|
Selling, general
& administrative
|
1,155
|
|
|
(1,712)
|
|
|
602
|
|
|
(557)
|
|
|
2,229
|
|
Impact on income from
operations
|
$
|
1,335
|
|
|
$
|
(2,093)
|
|
|
$
|
758
|
|
|
$
|
(758)
|
|
|
$
|
2,822
|
|
|
|
|
For the fiscal
quarters ended March 30, 2019, December 29, 2018 and
March 31, 2018, the impact on other income (expense), net from
gains or losses on deferred compensation plan assets was income of
$1,250, expense of $2,073 and income of $768, respectively. For the
six months ended March 30, 2019 and March 31, 2018, the
impact on other income (expense), net from gains or losses on
deferred compensation plan assets was expense of $823 and income of
$2,674, respectively.
|
|
|
(C)
|
Amortization of
intangibles is included in cost of sales and operating expenses as
summarized below:
|
|
|
Amortization of
intangibles
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Mar. 30,
2019
|
|
Dec. 29,
2018
|
|
Mar. 31,
2018
|
|
Mar. 30,
2019
|
|
Mar. 31,
2018
|
Cost of
sales
|
$
|
12,106
|
|
|
$
|
12,027
|
|
|
$
|
12,379
|
|
|
$
|
24,133
|
|
|
$
|
24,873
|
|
Amortization of
intangible assets
|
1,926
|
|
|
3,040
|
|
|
2,950
|
|
|
$
|
4,966
|
|
|
5,556
|
|
Impact on income from
operations
|
$
|
14,032
|
|
|
$
|
15,067
|
|
|
$
|
15,329
|
|
|
$
|
29,099
|
|
|
$
|
30,429
|
|
|
|
|
For the fiscal
quarters ended March 30, 2019, December 29, 2018 and
March 31, 2018, the impact on net income, net of tax was
$10,022 ($0.41 per diluted share), $10,818 ($0.45 per diluted
share) and $10,931 ($0.44 per diluted share), respectively. For the
six months ended March 30, 2019 and March 31, 2018, the
impact on net income, net of tax was $20,840 ($0.85 per diluted
share) and $21,704 ($0.87 per diluted share),
respectively.
|
|
|
(D)
|
For the fiscal
quarters ended December 29, 2018 and March 31, 2018, the
impact of inventory and favorable lease step-up costs related to
acquisitions was $456 ($353 net of tax ($0.01 per diluted share))
and $411 ($293 net of tax ($0.01 per diluted share)). For the six
months ended March 30, 2019 and March 31, 2018, the
impact of inventory and favorable lease step-up costs related to
acquisitions was $456 ($353 net of tax ($0.01 per diluted share))
and $411 ($293 net of tax ($0.01 per diluted share)).
|
|
|
(E)
|
For the fiscal
quarters ended March 30, 2019, December 29, 2018 and
March 31, 2018, the impact of restructuring charges was $880
($768 net of tax ($0.03 per diluted share)), $476 ($351 net of tax
($0.01 per diluted share)) and $726 ($555 net of tax ($0.02 per
diluted share)). For the six months ended March 30, 2019 and
March 31, 2018, the impact of restructuring charges was $1,356
($1,119 net of tax ($0.05 per diluted share)) and $1,886 ($1,405
net of tax ($0.05 per diluted share)).
|
|
|
(F)
|
For both the fiscal
quarter ended March 31, 2018 and six months ended March 31,
2018, the impact of costs related to acquisitions included $400
($400 net of tax ($0.01 per diluted share)).
|
|
|
(G)
|
For the fiscal
quarter ended March 31, 2018, other impairment charges (recoveries)
was a recovery of $110 ($110 net of tax ($0.00 per diluted share)).
For the six months ended March 31, 2018, other impairment charges
(recoveries) was a charge of $155 ($155 net of tax ($0.01 per
diluted share)).
|
|
|
(H)
|
The fiscal quarters
ended March 30, 2019, December 29, 2018 and
March 31, 2018 included a charge of $123 ($0.01 per diluted
share), a benefit of $2,598 ($0.10 per diluted share) and a benefit
of $299 ($0.01 per diluted share) of excess tax charges (benefits)
for employee stock-based compensation. The six months ended
March 30, 2019 included $2,475 ($0.10 per diluted share) of
excess tax benefits for employee stock-based compensation. The six
months ended March 31, 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. The six months
ended March 31, 2018 also included $12,750 ($0.51 per diluted
share) of excess tax benefits for employee stock-based
compensation.
|
Summarized balance sheet information is as follows (unaudited,
in thousands):
|
Mar. 30,
2019
|
|
Sep. 29,
2018
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash, cash
equivalents, restricted cash and short-term investments
|
$
|
349,615
|
|
|
$
|
311,473
|
|
Accounts receivable,
net
|
313,351
|
|
|
355,208
|
|
Inventories
|
483,741
|
|
|
486,741
|
|
Prepaid expenses and
other assets
|
79,465
|
|
|
85,080
|
|
Total current
assets
|
1,226,172
|
|
|
1,238,502
|
|
Property and
equipment, net
|
318,989
|
|
|
311,793
|
|
Other
assets
|
677,107
|
|
|
709,674
|
|
Total
assets
|
$
|
2,222,268
|
|
|
$
|
2,259,969
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term
borrowings
|
$
|
46,979
|
|
|
$
|
5,072
|
|
Accounts
payable
|
68,155
|
|
|
70,292
|
|
Other current
liabilities
|
249,764
|
|
|
297,474
|
|
Total current
liabilities
|
364,898
|
|
|
372,838
|
|
Other long-term
liabilities
|
544,588
|
|
|
572,667
|
|
Total stockholders'
equity
|
1,312,782
|
|
|
1,314,464
|
|
Total liabilities and
stockholders' equity
|
$
|
2,222,268
|
|
|
$
|
2,259,969
|
|
Reconciliation of GAAP to Non-GAAP net income (unaudited, in
thousands, except per share data, net of tax):
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Mar. 30,
2019
|
|
Dec. 29,
2018
|
|
Mar. 31,
2018
|
|
Mar. 30,
2019
|
|
Mar. 31,
2018
|
GAAP net income from
continuing operations
|
$
|
20,750
|
|
|
$
|
35,550
|
|
|
$
|
65,302
|
|
|
$
|
56,300
|
|
|
$
|
107,205
|
|
Stock-based
compensation expense
|
7,543
|
|
|
6,643
|
|
|
7,235
|
|
|
14,186
|
|
|
12,702
|
|
Amortization of
intangible assets
|
10,022
|
|
|
10,818
|
|
|
10,931
|
|
|
20,840
|
|
|
21,704
|
|
Restructuring
charges
|
768
|
|
|
351
|
|
|
555
|
|
|
1,119
|
|
|
1,405
|
|
Non-recurring tax
expense (benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,745
|
|
Tax charge (benefit)
from stock-based compensation expense
|
123
|
|
|
(2,598)
|
|
|
(299)
|
|
|
(2,475)
|
|
|
(12,750)
|
|
Other impairment
charges (recoveries)
|
—
|
|
|
—
|
|
|
(110)
|
|
|
—
|
|
|
155
|
|
Acquisition-related
costs
|
—
|
|
|
—
|
|
|
400
|
|
|
—
|
|
|
400
|
|
Purchase accounting
step-up
|
—
|
|
|
353
|
|
|
293
|
|
|
353
|
|
|
293
|
|
Non-GAAP net
income
|
$
|
39,206
|
|
|
$
|
51,117
|
|
|
$
|
84,307
|
|
|
$
|
90,323
|
|
|
$
|
172,859
|
|
Non-GAAP net income
per diluted share
|
$
|
1.61
|
|
|
$
|
2.09
|
|
|
$
|
3.37
|
|
|
$
|
3.70
|
|
|
$
|
6.91
|
|
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 commentary that 2019 would be a down year for
capital investment; the potential for new fabs to come online
starting in 2020; customer sentiment; timing of a bounce back in
materials processing; unresolved trade issues between the U.S. and
China; weakening of the PMI in the
Eurozone; performance of our OEM component business; and growth in
the aerospace and defense market. 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, in particular in China
and the Eurozone, 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 products, worldwide government economic
policies, including trade relations between the United States and China and Chinese monetary 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.
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SOURCE Coherent, Inc.