SANTA CLARA, Calif.,
Nov. 5, 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 fourth
fiscal quarter and fiscal year ended September 28, 2019.
FINANCIAL HIGHLIGHTS
|
Three Months
Ended
|
|
Year Ended
|
|
Sep. 28,
2019
|
|
Jun. 29,
2019
|
|
Sep. 29,
2018
|
|
Sep. 28,
2019
|
|
Sep. 29,
2018
|
GAAP
Results
|
|
|
|
|
|
|
|
|
|
|
|
(in millions except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
335.5
|
|
|
$
|
339.2
|
|
|
$
|
461.5
|
|
|
$
|
1,430.6
|
|
|
$
|
1,902.6
|
|
Net income
(loss)
|
$
|
0.6
|
|
|
$
|
(3.1)
|
|
|
$
|
73.2
|
|
|
$
|
53.8
|
|
|
$
|
247.4
|
|
Diluted
EPS
|
$
|
0.03
|
|
|
$
|
(0.13)
|
|
|
$
|
2.99
|
|
|
$
|
2.22
|
|
|
$
|
9.95
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Results
|
|
|
|
|
|
|
|
|
|
|
|
(in millions except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
21.4
|
|
|
$
|
32.1
|
|
|
$
|
78.8
|
|
|
$
|
143.8
|
|
|
$
|
338.9
|
|
Diluted
EPS
|
$
|
0.89
|
|
|
$
|
1.33
|
|
|
$
|
3.22
|
|
|
$
|
5.92
|
|
|
$
|
13.64
|
|
FOURTH FISCAL QUARTER AND FISCAL YEAR DETAILS
For the fourth fiscal quarter ended September 28, 2019,
Coherent announced net sales of $335.5
million and net income, on a U.S. generally accepted
accounting principles (GAAP) basis, of $0.6
million, or $0.03 per diluted
share.
These results compare to net sales of $461.5 million and net income of $73.2 million, or $2.99 per diluted share, for the fourth quarter
of fiscal 2018, and net sales of $339.2
million and net loss of $(3.1)
million, or $(0.13) per
diluted share, for the third quarter of fiscal 2019.
Non-GAAP net income for the fourth quarter of fiscal 2019 was
$21.4 million, or $0.89 per diluted share. Non-GAAP net
income for the fourth quarter of fiscal 2018 was $78.8 million, or $3.22 per diluted share. Non-GAAP net income for
the third quarter of fiscal 2019 was $32.1
million, or $1.33 per diluted
share. Reconciliations of GAAP to non-GAAP financial measures for
the three months ended September 28, 2019, June 29, 2019
and September 29, 2018 and for the fiscal years ended
September 28, 2019 and September 29, 2018 appear in the
financial statements portion of this release under the heading
"Reconciliation of GAAP to Non-GAAP net income".
For the fiscal year ended September 28, 2019, Coherent
posted net sales of $1,430.6 million
and net income on a GAAP basis of $53.8
million, or $2.22 per diluted
share, compared to the prior year net sales of $1,902.6 million and net income on a GAAP basis
of $247.4 million, or $9.95 per diluted share. For the fiscal year
ended September 28, 2019, Coherent posted net income on a
non-GAAP basis of $143.8 million, or
$5.92 per diluted share, compared to
the prior year net income on a non-GAAP basis of $338.9 million, or $13.64 per diluted share.
"We had mixed market results in our fourth fiscal quarter.
We took another step forward in the display market with the receipt
of an order covering a new OLED fab with deliveries scheduled for
the current fiscal year. Our semicap business outperformed
the market in fiscal 2019 and we expect it to do the same in fiscal
2020. The instrumentation business capped off a record year
and prospects look encouraging on a go-forward basis," said
John Ambroseo, Coherent's President
and Chief Executive Officer. "The book-to-bill for materials
processing market was positive in the fourth quarter, but a number
of factors continue to weigh on the market including weak PMIs, a
struggling auto market and continuing price pressure. The
market will eventually right itself, but we expect it to be a slow
and steady recovery rather than a revenue snapback. We're
taking the opportunity to enhance our product portfolio via R&D
investments and improve operational efficiency through our
previously announced cost reduction programs, which are proceeding
as originally outlined," he added.
CONFERENCE CALL REMINDER
Coherent 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 investor
relations page of the company's website at investors.coherent.com.
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 investor relations page.
Summarized statement of operations information is as follows
(unaudited, in thousands, except per share data):
|
|
Three Months
Ended
|
|
Year Ended
|
|
|
Sep. 28,
2019
|
|
Jun. 29,
2019
|
|
Sep. 29,
2018
|
|
Sep. 28,
2019
|
|
Sep. 29,
2018
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
335,464
|
|
$
|
339,170
|
|
$
|
461,548
|
|
$
|
1,430,640
|
|
$
|
1,902,573
|
|
Cost of
sales(A)(B)(D)(F)(G)
|
|
227,069
|
|
|
241,167
|
|
|
271,646
|
|
|
944,175
|
|
|
1,071,882
|
|
Gross
profit
|
|
108,395
|
|
|
98,003
|
|
|
189,902
|
|
|
486,465
|
|
|
830,691
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Research &
development(A)(B)(G)
|
|
27,258
|
|
|
30,692
|
|
|
32,108
|
|
|
117,353
|
|
|
132,586
|
|
Selling, general
& administrative(A)(B)(E)(G)
|
|
70,551
|
|
|
67,686
|
|
|
72,758
|
|
|
272,257
|
|
|
293,632
|
|
Other impairment
charges(C)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
766
|
|
Amortization of
intangible assets(D)
|
|
2,012
|
|
|
6,782
|
|
|
2,527
|
|
|
13,760
|
|
|
10,690
|
|
Total operating
expenses
|
|
99,821
|
|
|
105,160
|
|
|
107,393
|
|
|
403,370
|
|
|
437,674
|
|
Income (loss) from
operations
|
|
8,574
|
|
|
(7,157)
|
|
|
82,509
|
|
|
83,095
|
|
|
393,017
|
|
Other income
(expense), net(B)(G)
|
|
(5,258)
|
|
|
(4,386)
|
|
|
(5,827)
|
|
|
(23,047)
|
|
|
(31,462)
|
|
Income (loss) from
continuing operations, before income taxes
|
|
3,316
|
|
|
(11,543)
|
|
|
76,682
|
|
|
60,048
|
|
|
361,555
|
|
Provision (benefit)
for income taxes (H)
|
|
2,692
|
|
|
(8,444)
|
|
|
3,497
|
|
|
6,223
|
|
|
114,195
|
|
Net income (loss)
from continuing operations
|
|
624
|
|
|
(3,099)
|
|
|
73,185
|
|
|
53,825
|
|
|
247,360
|
|
Loss from
discontinued operations, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
Net income
(loss)
|
$
|
624
|
|
$
|
(3,099)
|
|
$
|
73,185
|
|
$
|
53,825
|
|
$
|
247,358
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
0.03
|
|
$
|
(0.13)
|
|
$
|
3.02
|
|
$
|
2.23
|
|
$
|
10.07
|
|
Diluted earnings per
share
|
$
|
0.03
|
|
$
|
(0.13)
|
|
$
|
2.99
|
|
$
|
2.22
|
|
$
|
9.95
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computations:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
23,919
|
|
|
24,054
|
|
|
24,236
|
|
|
24,118
|
|
|
24,572
|
|
Diluted
|
|
24,118
|
|
|
24,054
|
|
|
24,490
|
|
|
24,279
|
|
|
24,851
|
|
|
|
(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
|
|
Year Ended
|
|
|
Sep. 28,
2019
|
|
Jun. 29,
2019
|
|
Sep. 29,
2018
|
|
Sep. 28,
2019
|
|
Sep. 29,
2018
|
Cost of
sales
|
$
|
1,240
|
|
$
|
1,231
|
|
$
|
1,229
|
|
$
|
4,880
|
|
$
|
4,403
|
|
Research &
development
|
|
763
|
|
|
794
|
|
|
869
|
|
|
2,990
|
|
|
3,247
|
|
Selling, general
& administrative
|
|
7,928
|
|
|
7,630
|
|
|
6,571
|
|
|
28,596
|
|
|
25,088
|
|
Impact on income
(loss) from operations
|
$
|
9,931
|
|
$
|
9,655
|
|
$
|
8,669
|
|
$
|
36,466
|
|
$
|
32,738
|
|
|
|
|
For the fiscal
quarters ended Sep. 28, 2019, June 30, 2019 and Sep. 29, 2018,
the impact on net income (loss), net of tax was $9,091 ($0.38 per
diluted share), $8,243 ($0.34 per diluted share) and $7,414 ($0.30
per diluted share), respectively. For the fiscal years ended Sep.
28, 2019 and Sep. 29, 2018, the impact on net income, net of tax
was $31,520 ($1.30 per diluted share) and $27,665 ($1.11 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
|
|
Year Ended
|
|
|
Sep. 28,
2019
|
|
Jun. 29,
2019
|
|
Sep. 29,
2018
|
|
Sep. 28,
2019
|
|
Sep. 29,
2018
|
Cost of
sales
|
$
|
80
|
|
$
|
(19)
|
|
$
|
34
|
|
$
|
27
|
|
$
|
151
|
|
Research &
development
|
|
234
|
|
|
(24)
|
|
|
303
|
|
|
42
|
|
|
836
|
|
Selling, general
& administrative
|
|
1,889
|
|
|
87
|
|
|
1,579
|
|
|
1,419
|
|
|
4,222
|
|
Impact on income
(loss) from operations
|
$
|
2,203
|
|
$
|
44
|
|
$
|
1,916
|
|
$
|
1,488
|
|
$
|
5,209
|
|
|
|
|
For the fiscal
quarters ended Sep. 28, 2019, June 30, 2019 and Sep. 29, 2018,
the impact on other income net from gains or losses on deferred
compensation plan assets was income of $2,146, $12 and $1,957,
respectively. For the fiscal years ended Sep. 28, 2019 and Sep. 29,
2018, the impact on other income net from gain or losses on
deferred compensation plan assets was income of $1,335 and $5,047,
respectively.
|
|
|
(C)
|
For the fiscal year
ended Sep. 29, 2018, other impairment charges were $766 ($766 net
of tax ($0.03 per diluted share)).
|
|
|
(D)
|
Amortization of
intangibles is included in cost of sales and operating expenses as
summarized below:
|
Amortization of
intangibles
|
|
Three Months
Ended
|
|
Year Ended
|
|
|
Sep. 28,
2019
|
|
Jun. 29,
2019
|
|
Sep. 29,
2018
|
|
Sep. 28,
2019
|
|
Sep. 29,
2018
|
Cost of
sales
|
$
|
11,723
|
|
$
|
11,844
|
|
|
11,874
|
|
$
|
47,700
|
|
|
49,349
|
|
Amortization of
intangible assets
|
|
2,012
|
|
|
6,782
|
|
|
2,527
|
|
|
13,760
|
|
|
10,690
|
|
Impact on income
(loss) from operations
|
$
|
13,735
|
|
$
|
18,626
|
|
$
|
14,401
|
|
$
|
61,460
|
|
$
|
60,039
|
|
|
|
|
For the fiscal
quarters ended Sep. 28, 2019, June 30, 2019 and Sep. 29, 2018,
the impact on net income (loss), net of tax was $9,832 net of tax
($0.41 per diluted share), $13,278 net of tax ($0.55 per diluted
share) and $10,220 net of tax ($0.42 per diluted share),
respectively. For the fiscal years ended Sep. 28, 2019 and Sep. 29,
2018, the impact on net income, net of tax was $43,950 net of tax
($1.81 per diluted share) and $42,783 net of tax ($1.72 per diluted
share), respectively.
|
|
|
(E)
|
For the fiscal
quarter and year ended Sep. 29, 2018, the impact of costs related
to acquisitions included $206 ($206 net of tax ($0.01 per diluted
share)) and $735 ($735 net of tax ($0.03 per diluted share)) of
costs related to acquisitions, respectively.
|
|
|
(F)
|
For the fiscal years
ended Sep. 28, 2019 and Sep. 29, 2018, the impact of purchase
accounting step-up costs related to acquisitions was $456 ($353 net
of tax ($0.01 per diluted share)) and $803 ($574 net of tax ($0.02
per diluted share)), respectively.
|
|
|
(G)
|
For the fiscal
quarters ended Sep. 28, 2019, June 30, 2019 and Sep. 29, 2018,
the impact of restructuring charges was $92 ($131 net of tax ($0.00
per diluted share)), $21,273 ($14,771 net of tax ($0.61 per diluted
share)) and $871 ($632 net of tax ($0.02 per diluted share)),
respectively. For the fiscal years ended Sep. 28, 2019 and Sep. 29,
2018, the impact of restructuring charges was $22,721 ($16,021 net
of tax ($0.66 per diluted share)) and $3,949 ($2,907 net of tax
($0.12 per diluted share)), respectively.
|
|
|
(H)
|
The fiscal quarters
ended Sep. 28, 2019 and Sep. 29, 2018 included non-recurring income
tax net expense of $1,720 ($0.07 per diluted share) and
non-recurring income tax net benefit of $12,836 ($0.52 per diluted
share), respectively. The fiscal years ended Sep. 28, 2019 and Sep.
29, 2018 included non-recurring income tax net expense of $1,720
($0.06 per diluted share) and $28,909 ($1.17 per diluted share),
respectively. The fiscal quarters ended Sep. 28, 2019 and June 29,
2019 included a benefit of $36 ($0.00 per diluted share) and a
charge of $4 ($0.00 per diluted share) of excess tax charges
(benefits) for employee stock-based compensation, respectively. The
fiscal years ended Sep. 28, 2019 and Sep. 29, 2018 included $2,507
($0.10 per diluted share) and $12,754 ($0.51 per diluted share) of
excess tax benefits for employee stock-based compensation,
respectively.
|
Summarized balance sheet information is as follows (unaudited,
in thousands):
|
|
Sep. 28,
2019
|
|
Sep. 29,
2018
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash, cash
equivalents, restricted cash and short-term investments
|
$
|
306,745
|
|
$
|
311,473
|
|
Accounts receivable,
net
|
|
267,553
|
|
|
355,208
|
|
Inventories
|
|
442,530
|
|
|
486,741
|
|
Prepaid expenses and
other assets
|
|
77,993
|
|
|
85,080
|
|
Total current
assets
|
|
1,094,821
|
|
|
1,238,502
|
|
Property and
equipment, net
|
|
323,434
|
|
|
311,793
|
|
Other
assets
|
|
664,914
|
|
|
709,674
|
|
Total
assets
|
$
|
2,083,169
|
|
$
|
2,259,969
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term
borrowings
|
$
|
14,863
|
|
$
|
5,072
|
|
Accounts
payable
|
|
51,531
|
|
|
70,292
|
|
Other current
liabilities
|
|
173,920
|
|
|
297,474
|
|
Total current
liabilities
|
|
240,314
|
|
|
372,838
|
|
Other long-term
liabilities
|
|
558,119
|
|
|
572,667
|
|
Total stockholders'
equity
|
|
1,284,736
|
|
|
1,314,464
|
|
Total liabilities and
stockholders' equity
|
$
|
2,083,169
|
|
$
|
2,259,969
|
|
Reconciliation of GAAP to Non-GAAP net income (unaudited, in
thousands, (other than per share data), net of tax):
|
|
Three Months
Ended
|
|
Year Ended
|
|
|
Sep. 28,
2019
|
|
Jun. 29,
2019
|
|
Sep. 29,
2018
|
|
Sep. 28,
2019
|
|
Sep. 29,
2018
|
GAAP net income
(loss) from continuing operations
|
$
|
624
|
|
$
|
(3,099)
|
|
$
|
73,185
|
|
$
|
53,825
|
|
$
|
247,360
|
|
Stock-based
compensation expense
|
|
9,091
|
|
|
8,243
|
|
|
7,414
|
|
|
31,520
|
|
|
27,665
|
|
Amortization of
intangible assets
|
|
9,832
|
|
|
13,278
|
|
|
10,220
|
|
|
43,950
|
|
|
42,783
|
|
Restructuring
charges
|
|
131
|
|
|
14,771
|
|
|
632
|
|
|
16,021
|
|
|
2,907
|
|
Non-recurring tax
expense (benefit)
|
|
1,720
|
|
|
—
|
|
|
(12,836)
|
|
|
1,720
|
|
|
28,909
|
|
Tax charge (benefit)
from stock-based compensation expense
|
|
(36)
|
|
|
4
|
|
|
—
|
|
|
(2,507)
|
|
|
(12,754)
|
|
Other
impairment/asset charges (recoveries)
|
|
—
|
|
|
(1,083)
|
|
|
—
|
|
|
(1,083)
|
|
|
766
|
|
Acquisition-related
costs
|
|
—
|
|
|
—
|
|
|
206
|
|
|
—
|
|
|
735
|
|
Purchase accounting
step-up
|
|
—
|
|
|
—
|
|
|
—
|
|
|
353
|
|
|
574
|
|
Non-GAAP net
income
|
$
|
21,362
|
|
$
|
32,114
|
|
$
|
78,821
|
|
$
|
143,799
|
|
$
|
338,945
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
per diluted share
|
$
|
0.89
|
|
$
|
1.33
|
|
$
|
3.22
|
|
$
|
5.92
|
|
$
|
13.64
|
|
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 order deliveries scheduled in the company's display market; the
company's expected fiscal 2020 performance in its semicap business
relative to the market; future prospects for the company's
instrumentation business; factors weighing on the materials
processing market, including weak PMIs, a struggling auto market
and continuing price pressure; the possibility of the materials
processing market improving in the future and the pace at which
such recovery would occur; possible enhancements to the company's
product portfolio through its R&D investments; and progress on
the company's previously announced cost reduction programs,
including the possibility of achieving improved operational
efficiency. 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. Coherent 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, our ability to integrate the business
of Rofin and other acquisitions successfully, manage our expanded
operations and achieve anticipated synergies, our ability to
successfully manage our planned site consolidation projects and
other cost reduction programs and to achieve the related
anticipated savings and improved operational efficiency, and other
risks identified in Coherent's SEC filings. Readers are encouraged
to refer to the risk disclosures and critical accounting policies
described in Coherent's 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.
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. . P. O. Box
54980, Santa Clara, California
95056–0980 . Telephone (408) 764-4000
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SOURCE Coherent, Inc.