COHERENT, INC. 
By SANTA CLARA, Calif., Jan. 29, 2014 /PRNewswire/ -- Coherent, Inc. (NASDAQ, COHR), a world leader in providing photonics based solutions to the commercial and scientific research markets, today announced financial results for its first fiscal quarter ended December 28, 2013.
FINANCIAL HIGHLIGHTS
Three Months
Ended
-------------
Dec. Sept. Dec.
28, 28, 29,
2013 2013 2012
----- ----- -----
GAAP Results
(in millions except per share
data)
Bookings $201.5 $200.3 $176.0
Net sales $193.6 $213.1 $183.2
Net income $11.7 $20.5 $14.2
Diluted EPS $0.47 $0.83 $0.58
Non-GAAP Results
(in millions except per share
data)
Net income $17.1 $25.6 $18.6
Diluted EPS $0.68 $1.03 $0.77
FIRST FISCAL QUARTER DETAILS
For the first fiscal quarter ended December 28, 2013, Coherent announced net sales of $193.6 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $11.7 million, or $0.47 per diluted share. These results compare to net sales of $183.2 million and net income of $14.2 million, or $0.58 per diluted share, for the first quarter of fiscal 2013.
Non-GAAP net income for the first quarter of fiscal 2014 was $17.1 million, or $0.68 per diluted share. Non-GAAP net income for the first quarter of fiscal 2013 was $18.6 million, or $0.77 per diluted share. Beginning in the second quarter of fiscal 2013, the company revised its presentation of non-GAAP net income and non-GAAP diluted EPS for all periods presented to exclude the effect of intangibles amortization and inventory step up costs. For a complete overview of the differences between GAAP and non-GAAP results, please see the reconciliation table included at the end of this release.
Net sales for the fourth quarter of fiscal 2013 were $213.1 million and net income, on a GAAP basis, was $20.5 million, or $0.83 per diluted share. Non-GAAP net income for the fourth quarter of fiscal 2013 was $25.6 million, or $1.03 per diluted share.
Bookings received during the first fiscal quarter ended December 28, 2013 of $201.5 million increased 14.5% from $176.0 million in the same prior year period and increased by 0.6% compared to bookings of $200.3 million in the immediately preceding quarter. The book-to-bill ratio was 1.04, and ending backlog expected to ship in the next 12 months was $285.9 million at December 28, 2013, compared to a backlog of $285.8 million at September 28, 2013 and a backlog of $348.1 million at December 29, 2012.
"Despite first quarter sales and income that were below our expectations due in large part to unexpected softness in the advanced packaging market, recent bookings suggest the long-term outlook remains positive. First quarter orders in components and instrumentation were very strong for clinical applications in bioinstrumentation and cataract and LASIK in ophthalmology. Scientific bookings improved as did U.S. market sentiment as funding was restored following the Ryan-Murray budget deal. In the materials processing market, demand for high power fiber and carbon dioxide lasers helped set a new first quarter bookings record," said John Ambroseo, Coherent's President and CEO. "In the beginning of our second quarter, Coherent received record orders of $101.4 million for FPD annealing lasers. The orders included a number of Vyper(TM)/Linebeam 750 laser systems as well as several units of a higher-performance system derived from our Linebeam 1300 product. These advanced systems have an average selling price of $20 million and first deliveries will occur in fiscal 2015. The overall strength of the commercial business should allow us to expand our gross margin and sustain solid cash generation," Ambroseo concluded.
Coherent ended the quarter with cash, cash equivalents and short term investments of $273.7 million, an increase of $23.6 million from cash, cash equivalents and short term investments of $250.1 million at September 28, 2013.
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 can be accessed on the Company's website at either http://www.coherent.com/Investors/ or http://www.earnings.com. For those who are not able to listen to the live broadcast, the call will be archived for approximately three months on both web sites. A transcript of management's prepared remarks can be found at http://www.coherent.com/Investors/.
Summarized statement of operations information is as follows (unaudited, in thousands except per share data):
Three Months Ended
------------------
Dec. 28, Sept. Dec.
2013 28, 29,
2013 2012
Net Sales $193,556 $213,141 $183,202
Cost of
sales(A)(B)(C) 116,010 128,100 105,567
------- ------- -------
Gross profit 77,546 85,041 77,635
Operating
expenses:
Research &
development(A)(B) 20,937 21,556 19,301
Selling,
general &
administrative(A)(B) 39,891 36,437 36,982
Intangibles
amortization(C) 934 988 854
--- --- ---
Total
operating
expenses 61,762 58,981 57,137
------
Income from
operations 15,784 26,060 20,498
Other income
(expense),
net(B) (220) (308) (1,437)
---- ---- ------
Income before
income taxes 15,564 25,752 19,061
Provision for
income taxes 3,861 5,237 4,908
----- ----- -----
Net income $11,703 $20,515 $14,153
======= =======
Net income per
share:
Basic $0.48 $0.84 $0.60
===== ===== =====
Diluted $0.47 $0.83 $0.58
===== =====
Shares used in
computations:
Basic 24,542 24,385 23,770
====== ====== ======
Diluted 24,915 24,836 24,222
====== ====== ======
(A) Stock-related compensation
expense included in
operating results is
summarized below (all
footnote amounts are
unaudited, in thousands,
except per share data):
Stock-related Three Months
compensation expense Ended
------------
Dec. Sept. Dec.
28, 28, 29,
2013 2013 2012
----- ----- -----
Cost of sales $538 $546 $435
Research & development 522 454 476
Selling, general &
administrative 3,808 3,615 4,083
----- ----- -----
Impact on income from
operations $4,868 $4,615 $4,994
------ ---- ----
For the quarters ended
December 28, 2013, September
28, 2013 and December 29,
2012, the impact on net
income, net of tax was $3,529
($0.14 per diluted share),
$3,146 ($0.13 per diluted
share) and $3,511 ($0.14 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 Three Months
(benefit) Ended
------------
Dec. Sept. Dec.
28, 28, 29,
2013 2013 2012
----- ---- ----
Cost of sales $68 $3 $14
Research & development 296 3 62
Selling, general & administrative 1,823 (22) 426
----- --- ---
Impact on income from operations $2,187 $(16) $502
------ --- ---
For the quarters ended
December 28, 2013, September
28, 2013 and December 29,
2012, the impact on other
income (expense) net from
gains or losses on deferred
compensation plan assets was
income of $1,877, expense of
$163 and income of $294,
respectively.
(C) For the quarters ended
December 28, 2013, September
28, 2013 and December 29,
2012, the impact of
amortization of intangibles
expense was $2,445 ($1,823
net of tax ($0.07 per diluted
share)), $2,454 ($1,912 net
of tax ($0.08 per diluted
share)) and $1,181 ($867 net
of tax ($0.04 per diluted
share)).
Summarized balance sheet information is as follows (unaudited, in thousands):
Dec. 28, Sept.
2013 28,
2013
-------- ------
ASSETS
------
Current assets:
Cash, cash equivalents and short-
term investments $273,677 $250,110
Accounts receivable, net 115,680 136,759
Inventories 170,958 168,067
Prepaid expenses and other assets 73,061 74,290
------ ------
Total current assets 633,376 629,226
Property and equipment, net 114,405 114,333
Other assets 224,239 222,919
------- -------
Total assets $972,020 $966,478
======== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current portion of long-term
obligations $ - $2
Accounts payable 30,689 36,565
Other current liabilities 100,612 109,261
------- -------
Total current liabilities 131,301 145,828
Other long-term liabilities 65,211 62,132
Total stockholders' equity 775,508 758,518
------- -------
Total liabilities and stockholders'
equity $972,020 $966,478
======== ======
Reconciliation of GAAP to Non-GAAP net income (unaudited, in thousands, net of tax):
Three Months Ended
------------------
Dec. Sept. Dec.
28, 28, 29,
2013 2013 2012
----- ------ -----
GAAP net income $11,703 $20,515 $14,153
Stock-related compensation
expense 3,529 3,146 3,511
Intangibles amortization 1,823 1,912 867
Inventory step-up - - 64
Non-GAAP net income $17,055 $25,573 $18,595
======= ===== =====
Non-GAAP net income per
diluted share $0.68 $1.03 $0.77
===== ===== =====
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 the Company's long-term outlook, the timing for deliveries of the Company's products and the Company's ability to expand gross margin and sustain cash generation. 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, growth in demand for the Company's ELA products, the worldwide demand for flat panel displays, the demand for and use of short-pulse lasers in commercial applications, our successful implementation of our customer design wins, our and our customers' exposure to risks associated with worldwide economic conditions, the mix and pricing of our products, our ability to control expenses, 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 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 a world leader in providing photonics based solutions to the commercial and scientific research markets and part of the Standard & Poor's SmallCap 600 Index and the Russell 2000. Please direct any questions to Leen Simonet, Chief Financial Officer at 408-764-4110. For more information about Coherent, visit the Company's Web site at http://www.coherent.com/ for product and financial updates.
SOURCE Coherent, Inc.
