IPG Photonics (IPGP) 10-Q 3 Nov 15 2015 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 28, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015
Entity Registrant Name	IPG PHOTONICS CORP
Entity Central Index Key	1,111,928
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		52,781,322

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
CURRENT ASSETS:
Cash and cash equivalents	$ 651,220	$ 522,150
Accounts receivable, net	154,814	143,109
Inventories	197,635	171,009
Prepaid income taxes	32,571	20,967
Prepaid expenses and other current assets	23,221	21,295
Deferred income taxes, net	18,611	15,308
Total current assets	1,078,072	893,838
DEFERRED INCOME TAXES, NET	9,237	5,438
GOODWILL	508	455
INTANGIBLE ASSETS, NET	12,744	9,227
PROPERTY, PLANT AND EQUIPMENT, NET	286,514	275,082
OTHER ASSETS	21,131	26,847
TOTAL	1,408,206	1,210,887
CURRENT LIABILITIES:
Revolving line-of-credit facilities	248	2,631
Current portion of long-term debt	2,000	13,333
Accounts payable	20,862	17,141
Accrued expenses and other liabilities	76,913	64,057
Deferred income taxes, net	3,743	3,241
Income taxes payable	45,084	21,672
Total current liabilities	148,850	122,075
DEFERRED INCOME TAXES AND OTHER LONG-TERM LIABILITIES	25,303	22,584
LONG-TERM DEBT, NET OF CURRENT PORTION	18,167	19,667
Total liabilities	$ 192,320	$ 164,326
COMMITMENTS AND CONTINGENCIES (NOTE 12)
IPG PHOTONICS CORPORATION STOCKHOLDERS' EQUITY:
Common stock, $0.0001 par value, 175,000,000 shares authorized; 52,780,224 shares issued and outstanding at September 30, 2015; 52,369,688 shares issued and outstanding at December 31, 2014	$ 5	$ 5
Additional paid-in capital	597,803	567,617
Retained earnings	772,652	591,202
Accumulated other comprehensive loss	(155,802)	(112,263)
Total IPG Photonics Corporation stockholders' equity	1,214,658	1,046,561
NONCONTROLLING INTERESTS	1,228	0
Total equity	1,215,886	1,046,561
TOTAL	$ 1,408,206	$ 1,210,887

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	175,000,000	175,000,000
Common stock, shares issued	52,780,224	52,369,688
Common stock, shares outstanding	52,780,224	52,369,688

Consolidated Statements Of Inco

Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
NET SALES	$ 243,541	$ 199,651	$ 677,639	$ 562,430
COST OF SALES	110,237	90,561	307,805	259,829
GROSS PROFIT	133,304	109,090	369,834	302,601
OPERATING EXPENSES:
Sales and marketing	7,717	7,496	23,228	22,708
Research and development	16,221	13,447	45,565	39,593
General and administrative	14,679	14,172	42,474	40,212
Loss (gain) on foreign exchange	5,125	(3,614)	(460)	(4,039)
Total operating expenses	43,742	31,501	110,807	98,474
OPERATING INCOME	89,562	77,589	259,027	204,127
OTHER INCOME (EXPENSE), Net:
Interest expense, net	(40)	(4)	(335)	(143)
Other income, net	132	162	378	735
Total other income (expense)	92	158	43	592
INCOME BEFORE PROVISION FOR INCOME TAXES	89,654	77,747	259,070	204,719
PROVISION FOR INCOME TAXES	(26,897)	(22,547)	(77,721)	(60,705)
NET INCOME	62,757	55,200	181,349	144,014
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS	(34)	0	(101)	0
NET INCOME ATTRIBUTABLE TO IPG PHOTONICS CORPORATION	$ 62,791	$ 55,200	$ 181,450	$ 144,014
NET INCOME ATTRIBUTABLE TO IPG PHOTONICS CORPORATION PER SHARE:
Basic (in dollars per share)	$ 1.19	$ 1.06	$ 3.45	$ 2.77
Diluted (in dollars per share)	$ 1.18	$ 1.05	$ 3.40	$ 2.73
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic (shares)	52,675	52,088	52,628	52,060
Diluted (shares)	53,392	52,792	53,390	52,780

Consolidated Statements Of Comp

Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 62,757	$ 55,200	$ 181,349	$ 144,014
Other comprehensive income, net of tax:
Translation adjustments	(16,540)	(46,918)	(43,634)	(52,901)
Unrealized gain on derivatives	0	45	95	128
Total other comprehensive loss	(16,540)	(46,873)	(43,539)	(52,773)
Comprehensive income	46,217	8,327	137,810	91,241
Comprehensive loss attributable to noncontrolling interest	(285)	0	(351)	0
Comprehensive income attributable to IPG Photonics Corporation	$ 46,502	$ 8,327	$ 138,161	$ 91,241

Consolidated Statements Of Cash

Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 181,349	$ 144,014
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	31,079	26,409
Deferred income taxes	(7,144)	(5,954)
Stock-based compensation	13,875	11,067
Realized and unrealized gains on cash and cash equivalents and unrealized gains on foreign currency transactions	(3,893)	(4,547)
Other	191	464
Provisions for inventory, warranty & bad debt	29,414	19,906
Changes in assets and liabilities that (used) provided cash:
Accounts receivable	(20,004)	(37,926)
Inventories	(52,172)	(30,220)
Prepaid expenses and other current assets	2,062	202
Accounts payable	4,519	1,324
Accrued expenses and other liabilities	3,656	2,653
Income and other taxes payable	17,501	(609)
Tax benefit from exercise of employee stock options	(5,822)	(2,696)
Net cash provided by operating activities	194,611	124,087
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of and deposits on property, plant and equipment	(50,759)	(72,723)
Purchase of intangible assets	0	(2,000)
Proceeds from sales of property, plant and equipment	231	418
Acquisition of businesses, net of cash acquired	(4,958)	0
Other	63	66
Net cash used in investing activities	(55,423)	(74,239)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line-of-credit facilities	7,506	26,051
Payments on line-of-credit facilities	(9,780)	(26,836)
Principal payments on long-term borrowings	(12,833)	(1,000)
Exercise of employee stock options and issuances under employee stock purchase plan	10,489	3,730
Tax benefit from exercise of employee stock options	5,822	2,696
Net cash provided by financing activities	1,204	4,641
EFFECT OF CHANGES IN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	(11,322)	(15,747)
NET INCREASE IN CASH AND CASH EQUIVALENTS	129,070	38,742
CASH AND CASH EQUIVALENTS — Beginning of period	522,150	448,776
CASH AND CASH EQUIVALENTS — End of period	651,220	487,518
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	688	302
Cash paid for income taxes	65,376	56,730
Non-cash transactions:
Demonstration units transferred from inventory to other assets	1,995	2,649
Inventory transferred to machinery and equipment	2,371	1,303
Additions to property, plant and equipment included in accounts payable	$ (178)	$ 1,959

Consolidated Statements Of Equi

Consolidated Statements Of Equity - USD ($) $ in Thousands	Total	COMMON STOCK	ADDITIONAL PAID-IN CAPITAL	RETAINED EARNINGS	ACCUMULATED OTHER COMPREHENSIVE LOSS	TOTAL IPG PHOTONICS CORPORATION STOCKHOLDERS' EQUITY	NONCONTROLLING INTERESTS
Balance at Dec. 31, 2013		$ 5	$ 538,908	$ 390,757	$ (1,701)		$ 0
Balance, shares at Dec. 31, 2013		51,930,978
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options, shares		219,875
Exercise of stock options and related tax benefit from exercise		$ 0	5,402
Common stock issued under employee stock purchase plan, shares		17,518
Common stock issued under employee stock purchase plan		$ 0	1,024
Stock-based compensation			11,067
Net income attributable to IPG Photonics Corporation	$ 144,014			144,014
Translation adjustments	(52,901)				(52,901)
Change in unrealized gain on derivatives, net of tax	128				128
NCI of acquired company							0
Net loss attributable to NCI	0						0
Other comprehensive loss attributable to NCI	0						0
Balance at Sep. 30, 2014	1,036,703	$ 5	556,401	534,771	(54,474)	$ 1,036,703	0
Balance, shares at Sep. 30, 2014		52,168,371
Balance at Dec. 31, 2014	1,046,561	$ 5	567,617	591,202	(112,263)		0
Balance, shares at Dec. 31, 2014		52,369,688
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options, shares		392,913
Exercise of stock options and related tax benefit from exercise		$ 0	15,203
Common stock issued under employee stock purchase plan, shares		17,623
Common stock issued under employee stock purchase plan		$ 0	1,108
Stock-based compensation			13,875
Net income attributable to IPG Photonics Corporation	181,450			181,450
Translation adjustments	(43,634)				(43,634)
Change in unrealized gain on derivatives, net of tax	95				95
NCI of acquired company							1,579
Net loss attributable to NCI	101						(101)
Other comprehensive loss attributable to NCI	351						(250)
Balance at Sep. 30, 2015	$ 1,215,886	$ 5	$ 597,803	$ 772,652	$ (155,802)	$ 1,214,658	$ 1,228
Balance, shares at Sep. 30, 2015		52,780,224

Basis Of Presentation

Basis Of Presentation	9 Months Ended
	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis Of Presentation	BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared by IPG Photonics Corporation, or "IPG", "we", "our", "its" or the "Company". Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The consolidated financial statements include the Company's accounts and those of its subsidiaries. All intercompany balances have been eliminated in consolidation. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 . In the opinion of the Company's management, the unaudited financial information for the interim periods presented reflects all adjustments necessary for a fair presentation of the Company's financial position, results of operations and cash flows. The results reported in these consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. The Company has evaluated subsequent events through the time of filing this Quarterly Report on Form 10-Q with the SEC.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2015
Accounting Changes and Error Corrections [Abstract]
Recent Accounting Pronouncements	RECENT ACCOUNTING PRONOUNCEMENTS Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's financial statements upon adoption.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
Inventories	INVENTORIES Inventories consist of the following: September 30, December 31, 2015 2014 Components and raw materials $ 71,297 $ 54,925 Work-in-process 35,272 58,603 Finished goods 91,066 57,481 Total $ 197,635 $ 171,009 The Company recorded inventory provisions totaling $4,336 and $2,551 for the three months ended September 30, 2015 and 2014 , respectively, and $11,347 and $8,363 for the nine months ended September 30, 2015 and 2014 , respectively. These provisions relate to the recoverability of the value of inventories due to technological changes and excess quantities. These provisions are reported as a reduction to components and raw materials and finished goods.

Accrued Expenses And Other Liab

Accrued Expenses And Other Liabilities	9 Months Ended
	Sep. 30, 2015
Payables and Accruals [Abstract]
Accrued Expenses And Other Liabilities	ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following: September 30, December 31, 2015 2014 Accrued compensation $ 32,975 $ 31,673 Customer deposits and deferred revenue 23,652 16,605 Current portion of accrued warranty 13,413 9,489 Other 6,873 6,290 Total $ 76,913 $ 64,057

Financing Arrangements

Financing Arrangements	9 Months Ended
	Sep. 30, 2015
Debt Disclosure [Abstract]
Financing Arrangements	FINANCING ARRANGEMENTS The Company's borrowings under existing financing arrangements consist of the following: September 30, December 31, 2015 2014 Revolving line-of-credit facilities: European overdraft facilities $ 248 $ 828 Euro line-of-credit — 1,803 Total $ 248 $ 2,631 Term debt: U.S. long-term note $ — $ 11,333 Collateralized long-term note 20,167 21,667 Less: current portion (2,000 ) (13,333 ) Total long-term debt $ 18,167 $ 19,667 The U.S. and Euro lines-of-credit are available to certain foreign subsidiaries and allow for borrowings in the local currencies of those subsidiaries. At September 30, 2015 and December 31, 2014 , there were no amounts drawn on the U.S. line- of-credit, and there were $2,719 and $87 , respectively, of guarantees issued against the facility which reduces the amount of the facility to draw. At September 30, 2015 , there were no amounts drawn on the Euro line of credit, and there were $9,040 and $4,309 of guarantees issued against the facility as of September 30, 2015 and December 31, 2014 , respectively, which reduces the amount of the facility available to draw. On April 30, 2015, the Company increased its U.S. line of credit with Bank of America to $50,000 and extended the maturity to April 2020. At September 30, 2015 , the amount due on the collateralized long-term note was $20,167 of which $2,000 is the current portion. The note is secured by the Company's corporate aircraft. The interest rate on this note is fixed at 2.81% per annum and the note matures in October 2019, at which time the outstanding debt balance would be $12,000 . The U.S. long-term note outstanding at December 31, 2014 matured and was paid in June 2015.

Net Income Attributable To IPG

Net Income Attributable To IPG Photonics Corporation Per Share	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Net Income Attributable To IPG Photonics Corporation Per Share	NET INCOME ATTRIBUTABLE TO IPG PHOTONICS CORPORATION PER SHARE The following table sets forth the computation of diluted net income attributable to IPG Photonics Corporation per share: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income attributable to IPG Photonics Corporation $ 62,791 $ 55,200 $ 181,450 $ 144,014 Weighted average shares 52,675 52,088 52,628 52,060 Dilutive effect of common stock equivalents 717 704 762 720 Diluted weighted average common shares 53,392 52,792 53,390 52,780 Basic net income attributable to IPG Photonics Corporation per share $ 1.19 $ 1.06 $ 3.45 $ 2.77 Diluted net income attributable to IPG Photonics Corporation per share $ 1.18 $ 1.05 $ 3.40 $ 2.73 For the three months ended September 30, 2015 and 2014 , respectively, the computation of diluted weighted average common shares excludes common stock equivalents of 9,000 shares and 30,000 shares which includes restricted stock units ("RSUs") of 1,600 and 1,800 and performance stock units ("PSUs") of 4,300 and 0 , because the effect would be anti-dilutive. For the nine months ended September 30, 2015 and 2014 , respectively, the computation of diluted weighted averages common shares excludes 40,600 shares and 61,000 shares, which includes RSUs of 24,200 and 18,000 and PSUs of 9,400 and 0 because the effect would be anti-dilutive.

Derivative Financial Instrument

Derivative Financial Instruments	9 Months Ended
	Sep. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Financial Instruments	DERIVATIVE FINANCIAL INSTRUMENTS Derivative instruments – The Company's primary market exposures are to interest rates and foreign exchange rates. The Company uses certain derivative financial instruments to help manage these exposures. The Company executes these instruments with financial institutions it judges to be credit-worthy. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. The Company recognizes all derivative financial instruments as either assets or liabilities at fair value in the consolidated balance sheets. The Company has no derivatives that are not accounted for as a hedging instrument. Cash flow hedges – The Company previously had a cash flow hedge which was an interest rate swap associated with the U.S. long-term note. The interest rate swap agreement terminated with the note, which matured in June 2015. The fair value amounts in the consolidated balance sheet related to the interest rate swap were: Notional Amounts 1 Other Assets Other Current Liabilities 2 Other Long-Term Liabilities 2 September 30, December 31, September 30, December 31, September 30, December 31, September 30, December 31, 2015 2014 2015 2014 2015 2014 2015 2014 $ — $ 11,333 $ — $ — $ — $ 151 $ — $ — (1) Notional amounts represent the gross contract/notional amount of the derivatives outstanding. (2) As of December 31, 2014, the remaining balance of the U.S. long-term note outstanding was considered current because the note matured in June 2015. The derivative gains and losses in the consolidated statements of income related to the Company's interest rate swap contracts were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Effective portion recognized in other comprehensive loss, pretax: Interest rate swap $ — $ 145 $ 304 $ 427 Effective portion reclassified from other comprehensive loss to interest expense, pretax: Interest rate swap $ — $ (73 ) $ (153 ) $ (225 ) Ineffective portion recognized in income: Interest rate swap $ — $ — $ — $ —

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2015
Fair Value Disclosures [Abstract]
Fair Value Measurements	FAIR VALUE MEASUREMENTS The Company's financial instruments consist of cash equivalents, accounts receivable, accounts payable, drawings on revolving lines of credit, auction rate securities, long-term debt and certain derivative instruments. The valuation techniques used to measure fair value are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying amounts of cash equivalents, accounts receivable, accounts payable and drawings on revolving lines of credit are considered reasonable estimates of their fair market value, due to the short maturity of these instruments or as a result of the competitive market interest rates, which have been negotiated. If measured at fair value, accounts receivable and accounts payable would be classified as Level 3 and drawings on the revolving lines of credit would be classified as Level 2. The following table presents information about the Company's assets and liabilities measured at fair value: Fair Value Measurements at September 30, 2015 Total Level 1 Level 2 Level 3 Assets Cash equivalents $ 273,680 $ 273,680 $ — $ — Auction rate securities 1,134 — — 1,134 Total assets $ 274,814 $ 273,680 $ — $ 1,134 Liabilities Contingent purchase consideration 69 — — 69 Total liabilities $ 69 $ — $ — $ 69 Fair Value Measurements at December 31, 2014 Total Level 1 Level 2 Level 3 Assets Cash equivalents $ 266,011 $ 266,011 $ — $ — Auction rate securities 1,128 — — 1,128 Total assets $ 267,139 $ 266,011 $ — $ 1,128 Liabilities Contingent purchase consideration $ 98 $ — $ — $ 98 Interest rate swaps 151 — 151 — Total liabilities $ 249 $ — $ 151 $ 98 The fair value of the auction rate securities considered prices observed in inactive secondary markets for the securities held by the Company. The fair value of accrued contingent consideration incurred was determined using an income approach at the acquisition date and reporting date. That approach is based on significant inputs that are not observable in the market. Key assumptions include assessing the probability of meeting certain milestones required to earn the contingent consideration. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Auction Rate Securities Balance, beginning of period $ 1,132 $ 1,124 $ 1,128 $ 1,120 Change in fair value and accretion 2 2 6 6 Balance, end of period $ 1,134 $ 1,126 $ 1,134 $ 1,126 Contingent Purchase Consideration Balance, beginning of period $ 80 $ 357 $ 98 $ 375 Period transactions (7 ) — (7 ) — Change in fair value and currency fluctuations (4 ) (259 ) (22 ) (277 ) Balance, end of period $ 69 $ 98 $ 69 $ 98

Goodwill And Intangibles

Goodwill And Intangibles	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill And Intangibles	GOODWILL AND INTANGIBLES The carrying amount of goodwill was $508 and $455 on September 30, 2015 and December 31, 2014 , respectively. Intangible assets, subject to amortization, consisted of the following: September 30, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted- Average Lives Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted- Average Lives Patents $ 6,641 $ (4,485 ) $ 2,156 6 Years $ 6,641 $ (4,221 ) $ 2,420 6 Years Customer relationships 3,420 (3,178 ) 242 5 Years 3,660 (3,308 ) 352 5 Years Production know-how 6,719 (3,168 ) 3,551 8 Years 6,844 (2,630 ) 4,214 8 Years Technology, trademark and tradename 8,535 (1,740 ) 6,795 8 Years 3,315 (1,074 ) 2,241 8 Years $ 25,315 $ (12,571 ) $ 12,744 $ 20,460 $ (11,233 ) $ 9,227 During the first quarter of 2015, the Company purchased a 76% ownership interest in RukhTekh LLC ("RuchTech"). RuchTech's fair value at the time was $6,579 . The Company paid $5,000 , which represents the fair value of its ownership interest on March 15, 2015. In connection with this purchase, the Company has included $64 of Goodwill related to expected synergies for the Company's high-power systems product line and $6,298 of Purchased Technology intangibles. Amortization expense for the three months ended September 30, 2015 and 2014 was $585 and $527 , respectively. Amortization expense for the nine months ended September 30, 2015 and 2014 was $1,706 and $1,604 , respectively. The estimated future amortization expense for intangibles for the remainder of 2015 and subsequent years is as follows: 2015 2016 2017 2018 2019 Thereafter Total $619 $2,422 $2,422 $2,357 $1,768 $3,156 $12,744

Product Warranties

Product Warranties	9 Months Ended
	Sep. 30, 2015
Product Warranties Disclosures [Abstract]
Product Warranties	PRODUCT WARRANTIES The Company typically provides one to three -year parts and service warranties on lasers and amplifiers. Most of the Company's sales offices provide support to customers in their respective geographic areas. Warranty reserves have generally been sufficient to cover product warranty repair and replacement costs. The following table summarizes product warranty activity recorded during the nine months ended September 30, 2015 and 2014 . 2015 2014 Balance at January 1 $ 19,272 $ 14,997 Provision for warranty accrual 16,424 10,460 Warranty claims (8,627 ) (7,195 ) Foreign currency translation (1,059 ) (1,183 ) Balance at September 30 $ 26,010 $ 17,079 Accrued warranty reported in the accompanying consolidated financial statements as of September 30, 2015 and December 31, 2014 consisted of $13,413 and $9,489 in accrued expenses and other liabilities and $12,597 and $9,783 in other long-term liabilities, respectively.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Income Taxes	INCOME TAXES A reconciliation of the total amounts of unrecognized tax benefits is as follows: 2015 2014 Balance at January 1 $ 6,494 $ 6,501 Reductions of prior period positions — — Additions for tax positions in prior period — — (Reductions) additions for tax positions in current period — (795 ) Balance at September 30 $ 6,494 $ 5,706 Substantially all of the liability for uncertain tax benefits related to various federal, state and foreign income tax matters, would benefit the Company's effective tax rate, if recognized.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	COMMITMENTS AND CONTINGENCIES From time to time, the Company may be involved in disputes and legal proceedings in the ordinary course of its business. These proceedings may include allegations of infringement of intellectual property, commercial disputes and employment matters. As of September 30, 2015 and through the filing date of these Financial Statements, the Company has no legal proceedings ongoing that management estimates could have a material effect on the Company's Consolidated Financial Statements.

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
Components Of Inventories	Inventories consist of the following: September 30, December 31, 2015 2014 Components and raw materials $ 71,297 $ 54,925 Work-in-process 35,272 58,603 Finished goods 91,066 57,481 Total $ 197,635 $ 171,009

Accrued Expenses And Other Li21

Accrued Expenses And Other Liabilities (Tables)	9 Months Ended
	Sep. 30, 2015
Payables and Accruals [Abstract]
Components Of Accrued Expenses And Other Liabilities	Accrued expenses and other liabilities consist of the following: September 30, December 31, 2015 2014 Accrued compensation $ 32,975 $ 31,673 Customer deposits and deferred revenue 23,652 16,605 Current portion of accrued warranty 13,413 9,489 Other 6,873 6,290 Total $ 76,913 $ 64,057

Financing Arrangements (Tables)

Financing Arrangements (Tables)	9 Months Ended
	Sep. 30, 2015
Debt Disclosure [Abstract]
Borrowings Under Existing Financing Arrangements	The Company's borrowings under existing financing arrangements consist of the following: September 30, December 31, 2015 2014 Revolving line-of-credit facilities: European overdraft facilities $ 248 $ 828 Euro line-of-credit — 1,803 Total $ 248 $ 2,631 Term debt: U.S. long-term note $ — $ 11,333 Collateralized long-term note 20,167 21,667 Less: current portion (2,000 ) (13,333 ) Total long-term debt $ 18,167 $ 19,667

Net Income Attributable To IP23

Net Income Attributable To IPG Photonics Corporation Per Share (Tables)	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Computation Of Diluted Net Income Per Share	The following table sets forth the computation of diluted net income attributable to IPG Photonics Corporation per share: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income attributable to IPG Photonics Corporation $ 62,791 $ 55,200 $ 181,450 $ 144,014 Weighted average shares 52,675 52,088 52,628 52,060 Dilutive effect of common stock equivalents 717 704 762 720 Diluted weighted average common shares 53,392 52,792 53,390 52,780 Basic net income attributable to IPG Photonics Corporation per share $ 1.19 $ 1.06 $ 3.45 $ 2.77 Diluted net income attributable to IPG Photonics Corporation per share $ 1.18 $ 1.05 $ 3.40 $ 2.73

Derivative Financial Instrume24

Derivative Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Fair Value Of Cash Flow Hedges	The fair value amounts in the consolidated balance sheet related to the interest rate swap were: Notional Amounts 1 Other Assets Other Current Liabilities 2 Other Long-Term Liabilities 2 September 30, December 31, September 30, December 31, September 30, December 31, September 30, December 31, 2015 2014 2015 2014 2015 2014 2015 2014 $ — $ 11,333 $ — $ — $ — $ 151 $ — $ — (1) Notional amounts represent the gross contract/notional amount of the derivatives outstanding. (2) As of December 31, 2014, the remaining balance of the U.S. long-term note outstanding was considered current because the note matured in June 2015.
Derivative Gains (Losses) In The Consolidated Statements Of Income Related To Interest Rate Swap Contracts	The derivative gains and losses in the consolidated statements of income related to the Company's interest rate swap contracts were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Effective portion recognized in other comprehensive loss, pretax: Interest rate swap $ — $ 145 $ 304 $ 427 Effective portion reclassified from other comprehensive loss to interest expense, pretax: Interest rate swap $ — $ (73 ) $ (153 ) $ (225 ) Ineffective portion recognized in income: Interest rate swap $ — $ — $ — $ —

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value Disclosures [Abstract]
Assets And Liabilities Measured At Fair Value	The following table presents information about the Company's assets and liabilities measured at fair value: Fair Value Measurements at September 30, 2015 Total Level 1 Level 2 Level 3 Assets Cash equivalents $ 273,680 $ 273,680 $ — $ — Auction rate securities 1,134 — — 1,134 Total assets $ 274,814 $ 273,680 $ — $ 1,134 Liabilities Contingent purchase consideration 69 — — 69 Total liabilities $ 69 $ — $ — $ 69 Fair Value Measurements at December 31, 2014 Total Level 1 Level 2 Level 3 Assets Cash equivalents $ 266,011 $ 266,011 $ — $ — Auction rate securities 1,128 — — 1,128 Total assets $ 267,139 $ 266,011 $ — $ 1,128 Liabilities Contingent purchase consideration $ 98 $ — $ — $ 98 Interest rate swaps 151 — 151 — Total liabilities $ 249 $ — $ 151 $ 98
Fair Value Of Auction Rate Securities	Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Auction Rate Securities Balance, beginning of period $ 1,132 $ 1,124 $ 1,128 $ 1,120 Change in fair value and accretion 2 2 6 6 Balance, end of period $ 1,134 $ 1,126 $ 1,134 $ 1,126 Contingent Purchase Consideration Balance, beginning of period $ 80 $ 357 $ 98 $ 375 Period transactions (7 ) — (7 ) — Change in fair value and currency fluctuations (4 ) (259 ) (22 ) (277 ) Balance, end of period $ 69 $ 98 $ 69 $ 98

Goodwill And Intangibles (Table

Goodwill And Intangibles (Tables)	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Intangible assets, subject to amortization, consisted of the following: September 30, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted- Average Lives Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted- Average Lives Patents $ 6,641 $ (4,485 ) $ 2,156 6 Years $ 6,641 $ (4,221 ) $ 2,420 6 Years Customer relationships 3,420 (3,178 ) 242 5 Years 3,660 (3,308 ) 352 5 Years Production know-how 6,719 (3,168 ) 3,551 8 Years 6,844 (2,630 ) 4,214 8 Years Technology, trademark and tradename 8,535 (1,740 ) 6,795 8 Years 3,315 (1,074 ) 2,241 8 Years $ 25,315 $ (12,571 ) $ 12,744 $ 20,460 $ (11,233 ) $ 9,227
Estimated Future Amortization Expense For Intangibles	The estimated future amortization expense for intangibles for the remainder of 2015 and subsequent years is as follows: 2015 2016 2017 2018 2019 Thereafter Total $619 $2,422 $2,422 $2,357 $1,768 $3,156 $12,744

Product Warranties (Tables)

Product Warranties (Tables)	9 Months Ended
	Sep. 30, 2015
Product Warranties Disclosures [Abstract]
Summary Of Product Warranty Activity	The following table summarizes product warranty activity recorded during the nine months ended September 30, 2015 and 2014 . 2015 2014 Balance at January 1 $ 19,272 $ 14,997 Provision for warranty accrual 16,424 10,460 Warranty claims (8,627 ) (7,195 ) Foreign currency translation (1,059 ) (1,183 ) Balance at September 30 $ 26,010 $ 17,079

Income Taxes (Tables)

Income Taxes (Tables)	9 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Reconciliation Of The Total Amounts Of Unrecognized Tax Benefits	A reconciliation of the total amounts of unrecognized tax benefits is as follows: 2015 2014 Balance at January 1 $ 6,494 $ 6,501 Reductions of prior period positions — — Additions for tax positions in prior period — — (Reductions) additions for tax positions in current period — (795 ) Balance at September 30 $ 6,494 $ 5,706

Inventories (Components Of Inve

Inventories (Components Of Inventories) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Inventory Disclosure [Abstract]
Components and raw materials	$ 71,297		$ 71,297		$ 54,925
Work-in-process	35,272		35,272		58,603
Finished goods	91,066		91,066		57,481
Total	197,635		197,635		$ 171,009
Inventory provisions	$ 4,336	$ 2,551	$ 11,347	$ 8,363

Accrued Expenses And Other Li30

Accrued Expenses And Other Liabilities (Components Of Accrued Expenses And Other Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Payables and Accruals [Abstract]
Accrued compensation	$ 32,975	$ 31,673
Customer deposits and deferred revenue	23,652	16,605
Current portion of accrued warranty	13,413	9,489
Other	6,873	6,290
Total	$ 76,913	$ 64,057

Financing Arrangements (Borrowi

Financing Arrangements (Borrowings Under Existing Financing Arrangements) (Details) - USD ($)	Oct. 31, 2019	Sep. 30, 2015	Apr. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Revolving line-of-credit facilities		$ 248,000		$ 2,631,000
Less: current portion		(2,000,000)		(13,333,000)
Total long-term debt		18,167,000		19,667,000
Bank of America | Line of Credit
Debt Instrument [Line Items]
Line of credit with Bank of America			$ 50,000,000
European overdraft facilities
Debt Instrument [Line Items]
Revolving line-of-credit facilities		248,000		828,000
Euro line-of-credit
Debt Instrument [Line Items]
Revolving line-of-credit facilities		0		1,803,000
Guarantees issued		9,040,000		4,309,000
Amount drawn on line of credit		0		0
U.S. long-term note
Debt Instrument [Line Items]
Term debt		0		11,333,000
Guarantees issued		2,719,000		87,000
Amount drawn on line of credit		0		0
Collateralized long-term note
Debt Instrument [Line Items]
Term debt		20,167,000		$ 21,667,000
Collateralized long-term note | Collateralized long-term note
Debt Instrument [Line Items]
Amount due on collateralized long-term note		20,167,000
Current portion of collateralized long-term note		$ 2,000,000
Interest rate percentage		2.81%
Collateralized long-term note | Collateralized long-term note | Scenario, Forecast
Debt Instrument [Line Items]
Amount due on collateralized long-term note	$ 12,000,000

Net Income Attributable To IP32

Net Income Attributable To IPG Photonics Corporation Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share [Abstract]
Net income attributable to IPG Photonics Corporation (in dollars)	$ 62,791	$ 55,200	$ 181,450	$ 144,014
Weighted average shares	52,675,000	52,088,000	52,628,000	52,060,000
Dilutive effect of common stock equivalents	717,000	704,000	762,000	720,000
Diluted weighted average common shares	53,392,000	52,792,000	53,390,000	52,780,000
Basic net income attributable to IPG Photonics Corporation per share (in dollars per share)	$ 1.19	$ 1.06	$ 3.45	$ 2.77
Diluted net income attributable to IPG Photonics Corporation per share (in dollars per share)	$ 1.18	$ 1.05	$ 3.40	$ 2.73
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Options excluded from computation of diluted weighted average common shares	9,000	30,000	40,600	61,000
RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Options excluded from computation of diluted weighted average common shares	1,600,000	1,800,000	24,200,000	18,000,000
PSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Options excluded from computation of diluted weighted average common shares	4,300,000	0	9,400,000	0

Derivative Financial Instrume33

Derivative Financial Instruments (Fair Value Of Cash Flow Hedges) (Details) - USD ($)		Sep. 30, 2015	Dec. 31, 2014
Interest rate swap
Derivatives, Fair Value [Line Items]
Notional amount of derivatives	[1]	$ 0	$ 11,333,000
Other Assets | Interest rate swap
Derivatives, Fair Value [Line Items]
Derivative asset fair value		0	0
Other Current Laibilities | Interest rate swap
Derivatives, Fair Value [Line Items]
Derivative liability fair value	[2]	0	151,000
Other Long-Term Laibilities | Interest rate swap
Derivatives, Fair Value [Line Items]
Derivative liability fair value	[2]	0	$ 0
Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount of derivatives		$ 0
[1]	Notional amounts represent the gross contract/notional amount of the derivatives outstanding.
[2]	As of December 31, 2014, the remaining balance of the U.S. long-term note outstanding was considered current because the note matured in June 2015.

Derivative Financial Instrume34

Derivative Financial Instruments (Derivative Gains (Losses) In The Consolidated Statements Of Income Related To Interest Rate Swap Contracts) (Details) - Interest rate swap - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Derivative Instruments, Gain (Loss) [Line Items]
Effective portion recognized in other comprehensive loss, pretax:	$ 0	$ 145	$ 304	$ 427
Effective portion reclassified from other comprehensive loss to interest expense, pretax:	0	(73)	(153)	(225)
Ineffective portion recognized in income:	$ 0	$ 0	$ 0	$ 0

Fair Value Measurements (Assets

Fair Value Measurements (Assets And Liabilities Measured At Fair Value) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 274,814	$ 267,139
Total liabilities	69	249
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	273,680	266,011
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities	0	151
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	1,134	1,128
Total liabilities	69	98
Cash equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	273,680	266,011
Cash equivalents | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	273,680	266,011
Auction rate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	1,134	1,128
Auction rate securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets		0
Auction rate securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	1,134	1,128
Contingent purchase consideration
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities	69	98
Contingent purchase consideration | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities		0
Contingent purchase consideration | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities	$ 69	98
Interest rate swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities		151
Interest rate swap | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities		151
Interest rate swap | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities		$ 0

Fair Value Measurements (Fair V

Fair Value Measurements (Fair Value Of Auction Rate Securities) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Auction rate securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, beginning of period	$ 1,132	$ 1,124	$ 1,128	$ 1,120
Change in fair value and accretion	2	2	6	6
Balance, end of period	1,134	1,126	1,134	1,126
Contingent purchase consideration
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, beginning of period	80	357	98	375
Period transactions	(7)	0	(7)	0
Change in fair value and currency fluctuations	(4)	(259)	(22)	(277)
Balance, end of period	$ 69	$ 98	$ 69	$ 98

Goodwill And Intangibles (Narra

Goodwill And Intangibles (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2015	Mar. 31, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Carrying amount of goodwill	$ 508			$ 508		$ 455
Amortization expense	$ 585		$ 527	$ 1,706	$ 1,604
RukhTekh LLC
Finite-Lived Intangible Assets [Line Items]
Carrying amount of goodwill		$ 64
Ownership interest purchased (percentage)		76.00%
Fair value of RukhTekh		$ 6,579
Amount paid to purchase ownership interest		5,000
RukhTekh LLC | Purchased Technology intangibles
Finite-Lived Intangible Assets [Line Items]
Amount of Purchased Technology intangibles		$ 6,298

Goodwill And Intangibles (Intan

Goodwill And Intangibles (Intangible Assets) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 25,315	$ 20,460
Accumulated Amortization	(12,571)	(11,233)
Net Carrying Amount	12,744	9,227
Patents
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	6,641	6,641
Accumulated Amortization	(4,485)	(4,221)
Net Carrying Amount	$ 2,156	$ 2,420
Weighted- Average Lives	6 years	6 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 3,420	$ 3,660
Accumulated Amortization	(3,178)	(3,308)
Net Carrying Amount	$ 242	$ 352
Weighted- Average Lives	5 years	5 years
Production know-how
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 6,719	$ 6,844
Accumulated Amortization	(3,168)	(2,630)
Net Carrying Amount	$ 3,551	$ 4,214
Weighted- Average Lives	8 years	8 years
Technology, trademark and tradename
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 8,535	$ 3,315
Accumulated Amortization	(1,740)	(1,074)
Net Carrying Amount	$ 6,795	$ 2,241
Weighted- Average Lives	8 years	8 years

Goodwill And Intangibles (Estim

Goodwill And Intangibles (Estimated Future Amortization Expense For Intangibles) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
2,015	$ 619
2,016	2,422
2,017	2,422
2,018	2,357
2,019	1,768
Thereafter	3,156
Net Carrying Amount	$ 12,744	$ 9,227

Product Warranties (Narrative)

Product Warranties (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Product Warranties [Line Items]
Accrued warranty reported in accrued expenses and other liabilities	$ 13,413	$ 9,489
Accrued warranty reported in other long-term liabilities	$ 12,597	$ 9,783
Minimum
Product Warranties [Line Items]
Service warranties on lasers and amplifiers	1 year
Maximum
Product Warranties [Line Items]
Service warranties on lasers and amplifiers	3 years

Product Warranties (Summary Of

Product Warranties (Summary Of Product Warranty Activity) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Balance at January 1	$ 19,272	$ 14,997
Provision for warranty accrual	16,424	10,460
Warranty claims	(8,627)	(7,195)
Foreign currency translation	(1,059)	(1,183)
Balance at September 30	$ 26,010	$ 17,079

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance at January 1	$ 6,494	$ 6,501
Reductions of prior period positions	0	0
Additions for tax positions in prior period	0	0
(Reductions) additions for tax positions in current period	0	(795)
Balance at September 30	$ 6,494	$ 5,706